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

Exercise 2

Foundation Field, located in East Texas, is jointly owned by Bryant Company (60%
WI) and Joyner Company (40% WI). Bryant, which is the operator, estimates that gross
gas production during July will be 40,000 Mcf. Bryant Company makes confirmed
nominations of 30,000 Mcf, and Joyner Company makes confirmed nominations of
10,000 Mcf to a pipeline company. Actual July production totals 50,000 Mcf. Assume
that the appropriate price is $10.80/Mcf.
REqUIRED: Determine the number of Mcfs of actual production to be allocated to
each party, along with each producer's resulting overdeliveries and underdeliveries to
the pipeline, using the following:
a. The confirmed nominations method
b. The entitlement method