3 short Oil and Gas Accounting Resolution step by step

3 short Oil and Gas Accounting Resolution step by step
OIL and Gas Accounting Ownership Interest practice problem O&G Upstream Co. leased 100 acres from Robert Jones for a 1/7th royalty interest. O&G then carved out a 2.5% ORRI that it awarded to Geologist George for finding the reservoir. Short on cash, O&G obtained a loan secured by a 15% Production Payment Interest from the first 9,000 barrels produced. Finally, O&G awards a 1/6th carved out WI to Big Rig Drilling. Determine the final ownership and working interests for each of the participants. At the end of the first year, O&G paid a delay rental of $100/acre on the lease and began drilling at the end of the first month of the second year. Over the course of the year, 15 wells were drilled at a cost of $3,200,000 per well. Resulting aggregate production at the end of year 2 was 2,500,000 bbls which were sold at an average price of $52.26/bbl. Lifting costs for the year averaged $17.19/bbl. What were the net proceeds for each participant in this lease at the end of year 2? O&G Upstream Co. leased 100 acres from Robert Jones for a 1/8th royalty interest. O&G then carved out a 5% ORRI that it awarded to Geologist George for finding the reservoir. Short on cash, O&G obtained a loan secured by a 20% Production Payment Interest. Finally, O&G awards a 1/6th WI to Big Rig Drilling. Determine the final ownership and working interests for each of the participants.