Pete Oil and Friendly Oil own 40% and 60% of the working interest of Lease A, respectively. Assume there is no royalty due from production on this property. Production, oil prices and actual deliveries taken are as follows:
Production Price Delivery to Pete Delivery to Friendly
May 900,000 bbls $105.00 400,000 500,000
June 820,000 bbls $104.00 620,000 200,000
July 830,000 bbls $102.00 200,000 630,000
1. State if Pete is overdelivered or underdelivered on a cumulative basis at the end of July and give the amount in barrels.
2. What is Pete’s balance (in dollars) in the Overlifty/Underlift account at the end of July and does that represent a net overlift or net underlift?
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