Is drilled wells from leased acre is capitilized cost?

on the various leases. If Shen-n-Doal dild not would allow him a two year window to drill on the lease within the 2 year window then Shen-n-Doah's rights to the property would terminate. If hydrocarbon was found then Shen in return for a royalty payment to the land owners that ranged from 12.5% to 20.0% of the value of total production. A good deal for the land owner and Shen-n-Doah. Exhibit 2 provides a list of capital expenditures incurred in 2017. -n-Doah could produce and sell the hydrocarbon jar Exhibit 2 2017 Capital Spending 1/1/2017 Leased 90,000 acres in Caddo County OK for $1,000 per acre 1/1/2017 Lease 90,000 acres in Stephens County Ok for S2,000 per acreR 1/1/2017 Leased 90,000 acres in Coal County OK for S750 per acre 1/1/2017 Purchased Seismic data from Seismic Inc to evaluate potential drilling $90,000.00 S180,000.00 S67,500.00 $1,000,000.00 sites 1/10/2017 Hired Canyon Drilling to drill 30 wells during the 2017 and 2018 with a S50,000.00 retainer fee to be applied to the last well drilled. If the 30 wells are not drilled then the retainer fee is released back to the company from the escrow account. $12,000,000.00 1/31/2017 Drilled 3 Wells (see lease production records) at $4 Million per Well 2/28/2017 Drilled 2 Wells (see lease production records) at $4 Million per Well 3/31/2017 Drilled 2 Wells (see lease production records) at S4 Million per Well $8,000,000.00 $8,000,000.00 3/31/2017 Connected to TransOK's gas pipeline 4/30/2017 Drilled 1 well (see lease production records) at $4,000,000 5/31/2017 Drilled 3 wells (see lease production records) at $12,000,000 6/30/2017 Drill 3 wells (see lease production records) at S12,000,000 8/31/2017 Drilled I well (see lease production records) at $4,000,000 9/30/2017 Drilled 2 wells (see lease production records at $8,000,000 $500,000.00 $4,000,000.00 S12,000,000.00 $12,000,000.00 $4,000,000.00 $8,000,000.00 $4,000,000.00 10/31/2017 Drilled I well (see lease production records at $4,000,000