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Chapter 12 Exercise 2.docx

Chapter 12 Exercise 2.docx - Chapter 12 Oil and Gas...

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Chapter 12 Oil and Gas Industry Exercise 3 Diderot Drilling Company has leased property on which oil has been discovered. Wells on this property produced 18,000 barrels of oil during the past year that sold at an average sales price of $55 per barrel. Total oil resources of this property are estimated to be 250,000 barrels. The lease provided for an outright payment of $500,000 to the lessor (owner) before drilling could be commenced and an annual rental of $31,500. A premium of 5% of the sales price of every barrel
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  • Spring '16
  • Leasehold estate, Barrel, Diderot Drilling Company, Advanced Corporate Taxation

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