4 WI-25% RI=20% 9 WI-25% RI=20% 2 8 10 12 14 HBP WI-25%-WI-25% 13 18 WI-25% RI-2

Question

4 WI-25% RI=20% 9 WI-25% RI=20% 2 8 10 12 14 HBP WI-25%-WI-25% 13 18 WI-25% RI-20% 17 HBP WI=25% RI=20% 16 HBP | | 15 WI-25% RI-20% 21 wi-25% RI=20% RI-20% 19 20 23 24 30 29 28 27 26 25 35 WI-25% RI=20% 31 32 34 36 The grid shows the shaded section numbers and ownership for TUO&G;, all sections are 640 acres with a 25% working interest and 20% revenue interest Sections 14, 16, 17, in red, are held by production. Any sections without ownership data have no ownership by TUO&G; 1) Determine the NET acres that are currently leased by TUO&G; 2) Quantify TUO&G; developed and undeveloped NET acreage position. 3) For the following scenario, please answer the question: It is the middle of 2018, all of the leases were taken on 1/1/2016 with a 3 year primary term and a single 2 year extension. Costs for the leases were $1000 with a $300 extension cost. Describe at least 2 options available to TUO&G; to maintain the non-HBP leases through the term of the lease? 4) In a different scenario, answer the questions: Since TUO&G; drilled sections 14,16, & 17, prices dropped dramatically and they delayed their drilling plans. They are now in a situation where the acreage termination is approaching and product pricing has started to rebound making drilling in the future viable based on the drilling well results in sections 14,16, &17. The capital provider wants to monetize the asset and asks the team to prioritize lease retention expenditures prior to selling the asset. Which leases(s) would have the highest priority and why? Which would have the least priority and why?

Explanation / Answer

Joan Robinson’s growth model deals with
(I) Desired growth rate
(II) Possible growth rate
(III) Natural growth rate
(IV) Warranted growth rate

I and III

II and IV

I and II

III and IV

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