Question 1

Bayou Oil Corporation had the following information and account balances for the years shown relating to Lease No. 1.

	12/31/Y1	12/31/Y2
Proved property cost ..	$ 40,000	$ 40,000
Accumulated DD&A proved property	4,000
Wells and equipment IDC ..	400,000	600,000
Accumulated DD&A wells and equipment IDC .	60,000
Wells and equipment L&WE..	300,000	420,000
Accumulated DD&A wells and equipment L&WE.	45,000

	Year 1	Year 2
Proved reserves, 12/31 - Oil ..	30,000 bbl	50,000 bbl
Gas.	450,000 Mcf		600,000 Mcf
Proved undeveloped reserves, 12/31 - Oil	10,000 bbl	12,000 bbl
Gas	200,000 Mcf	120,000 Mcf
Production during 2015 and 2016 - Oil	5,000 bbl	7,000 bbl
Gas	50,000 Mcf		70,000 Mcf

REQUIRED: Compute DD&A for the year ended 12/31/Year 2 using:

1. A common unit of measure based on equivalent Mcf
2. Gas as the dominant mineral
3. Same relative Proportion