Congratulations! You have just inherited 250 acres of land insouth Texas. An oil company approached you and offered you a one1/2 percent (0.005) royalty for the rights to your oil. Given thefollowing information, answer the questions below. Size = 250 acresPorosity of oil zone rock = 20 % Recoverable Oil = 30 % You do notneed to consider the cost of the wells. Thickness of oil zone = 20feet Oil saturation in pores = 40 % Life of the wells = 30 yearsHelpful conversions 1 acre = 43,560 square feet 1 cubic foot =0.178 barrels
1. How many barrels of oil are in the ground?
2. How many barrels of oil are recoverable?
3. What is the value of recoverable oil at $95 per barrel?
4. What is the value of recoverable oil at $30 per barrel?
5. How much total money do you expect if oil stays at $95 perbarrel?
6. How much total money do you expect if oil stays at $30 perbarrel?
7. What will be your average monthly royalty check at $95 perbarrel?
8. What will be your average monthly royalty check at $30 perbarrel?
