Assuming that ad valorem tax is negligible

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Calculate the Economic Life in STB/month for an oil lease with WI = 100%, NRI = 87.5%, lease operating expense = $5,000 per month, price of oil = $15/STB, price of associated gas = $2.25/Mscf, GOR = 500 scf/STB, oil and gas severance taxes = 7.085%. Assuming that ad valorem tax is negligible. Please show work.

Reference no: EM13839787

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