Problem 4 (25 points) An oil lease was recently made available Expense the qualifying portion of the IDC's in the year incurred. Depreciate t beginning in year 1 using 7 year MACRS rate based on half year convention while the qualifying geological and geophysical costs will be a and you are considering the economics of acquiring and drilling on the lease he tangible equipment completion cost bonus is the basis for costd eamortized over two years. Take a six-month deduction 2 salvage and write-off considerations omics.TheerrectiveTederaTincoretaxrate is 40%. Neglect the end of the Rane nnual Production (bbls) 87,500 $40 60,000 Selling Price ($/bbl) Total Initial Reserves (bbls) Deplaudiou perating Costs, $/bbl Intangible Drilling Costs D angible Completion Costs Dereito Mease Bonus Geological and Geophysical Costs 500,000 1,200,000 1,500,000 8 600,000 te the year 0, 1 and 2 cash flow from the view point of Small Independent producer (1000 bbl/day), 2) Integrated Oil and Gas producer b) Problem 4 (25 points) An oil lease was recently made available Expense the qualifying portion of the IDC's in the year incurred. Depreciate t beginning in year 1 using 7 year MACRS rate based on half year convention while the qualifying geological and geophysical costs will be a and you are considering the economics of acquiring and drilling on the lease he tangible equipment completion cost bonus is the basis for costd eamortized over two years. Take a six-month deduction 2 salvage and write-off considerations omics.TheerrectiveTederaTincoretaxrate is 40%. Neglect the end of the Rane nnual Production (bbls) 87,500 $40 60,000 Selling Price ($/bbl) Total Initial Reserves (bbls) Deplaudiou perating Costs, $/bbl Intangible Drilling Costs D angible Completion Costs Dereito Mease Bonus Geological and Geophysical Costs 500,000 1,200,000 1,500,000 8 600,000 te the year 0, 1 and 2 cash flow from the view point of Small Independent producer (1000 bbl/day), 2) Integrated Oil and Gas producer b)