Fundamentals of Oil & Gas Accounting 5th Edition by Rebecca Gallun, Charlotte Wright

Exercise 5

During 2015, Post Oil and Gas Company completed the last well from its drilling
and production platform off the coast of Louisiana. Unrecovered costs not including
decommissioning costs on December 31, 2015, were $25 million, including $5 million
in acquisition costs and $20 million in drilling and development costs. Total proved
developed reserves were estimated to be 600,000 barrels as of January 1, 2015.
Production during 2015 was 30,000 barrels. At the end of the life of the reservoir,
decommissioning costs are estimated to be $14 million, and salvage value is estimated
to be $1 million. Compute DD&A for 2015.