Question
QUESTION THREE (3) (a) Aker Oil Company, a joint venture operator, incurred the following costs in drilling an oil well. i Drilling (on footage
QUESTION THREE (3) (a) Aker Oil Company, a joint venture operator, incurred the following costs in drilling an oil well. i Drilling (on footage basis) ii. Cost of clearing and grading unpaved roadways to the drill site iii Construction of overflow mud pits iv Surface casing used in the well v Services such as acidizing and testing vi Cementing services for casing vii Tubing and control valves USD 675,256 23,560 56,700 675,908 246,200 17,890 57,500 116,700 viii Flow lines, tanks and treaters Required: Briefly explain Tangible and Intangible drilling cost and classify the above well drilling cost into tangible and intangible drilling costs. [10 marks] (b) Explain the Impairment of Exploration and Evaluation (E&E) assets as per IFRS 6 and give four possible impairment indicators of E&E assets. [10 marks] [Total; 20 marks]
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