Question
Two leases in Eastern Wyoming are being combined to form the Eastern Field Unit. Lease WI RI Acreage Contributed Estimated Net Recoverable bbls Lease 1
Two leases in Eastern Wyoming are being combined to form the Eastern Field Unit.
Lease | WI | RI | Acreage Contributed | Estimated Net Recoverable bbls |
Lease 1 | 100% Mountain Company | 1/6 Jane Smith, 1/8 Alan Green | 400 acres | 180,000 bbls |
Lease 2 | 60% River Corp, 40% Hilltop | 1/5 Karen White | 250 acres | 220,000 bbls |
Requirement:
a. Determine the participation factors for each party assuming the participation factors are based on the acreage contributed.
b. Determine the participation factors for each party assuming the participation factors are based on the net recoverable barrels contributed.
c. Determine the participation factors for each party assuming the participation factors are based on the acreage contributed weighted 30% and the net recoverable barrels weighted 70%.
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