15. Tyler Oil Corporation estimates the following costs to acquire, drill, and complete a well on Lease A: Drilling and completion costs Acquisition costs Selling price of oil ($/bbl). Lifting costs ($/bbl). State severance tax rate $ 80,000 600,000 1,000 25 5% 20% Royalty interest REQUIRED: Would the investment be profitable if proved reserves are: a. 12,000 bbl? b. 18,000 bbl? c. 24,000 bbl?
15. Tyler Oil Corporation estimates the following costs to acquire, drill, and complete a well on Lease A: Drilling and completion costs Acquisition costs Selling price of oil ($/bbl). Lifting costs ($/bbl). State severance tax rate $ 80,000 600,000 1,000 25 5% 20% Royalty interest REQUIRED: Would the investment be profitable if proved reserves are: a. 12,000 bbl? b. 18,000 bbl? c. 24,000 bbl?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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