Use the following information to answer questions a-g. Any cash outflows should be enclosed in parentheses ().

Aggie Oil has the following information related to reserves at 12/31/2017.

	bbls	Mcf	Development Costs
2015	50,000	150,000	$100,000
2016	30,000	120,000	$100,000
2017	20,000	90,000	$100,000

Additionally, production costs are $20 per BOE. The first day 12 month average price of oil for 2014 was $90.00/bbl and gas was $4.50/mcf. The company's tax rate was 30%.

Using the information above complete the following schedule. To use the mid-year convention for calculating PV on your calculators or Excel use .5, 1.5, and 2.5 as N. Even though the question only asks for the total values, you must calculate each year, round to whole dollars, then sum the totals.

	2015	2016	2017	Total
Future Cash Inflows				a.
Future Costs:				N/A
Development Costs				b.
Production Costs				c.
Future Income Tax Expense				d.
Future Net Cash Flows				e.
10% Annual Discount				f.
Standardized measure of discounted future net cash flows (SMOG)				g.

a. Determine total future cash inflows.

QUESTION 2

b. Determine total future development costs

QUESTION 3

c. Determine total future production costs.

QUESTION 4

d. Determine total future income tax expense.

QUESTION 5

e. Determine total future net cash flows.

QUESTION 6

f. Determine total annual 10% discount.

QUESTION 7

g. Determine total SMOG.