Permian Partners (PP) produces from aging oil fields in west Texas. Production is 1.96 million barrels per year in 2018, but production is declining at 8% per year for the foreseeable future. Costs of production, transportation, and administration add up to $26.60 per barrel. The average oil price was $66.60 per barrel in 2018. PP has 8.6 million shares outstanding. The cost of capital is 10%. All of PPs net income is distributed as dividends. For simplicity, assume that the company will stay in business forever and that costs per barrel are constant at $26.60. Also, ignore taxes.

a. Assume that oil prices are expected to fall to $61.60 per barrel in 2019, $56.60 per barrel in 2020,and $51.60 per barrel in 2021. After 2021, assume a long-term trend of oil-price increases at 6% per year. What is the ending 2018 value of one PP share? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

b. What is PPs EPS/P ratio? (Do not round intermediate calculations. Round your answer to 4 decimal places.)