Tuesday, November 8, 2011
At the end of March, an oil well was producing 50.5 m3 of oil per day and 72.1 m3 of water per day. Each month, the well's oil production decreases by 1.855% and water production increases by 2.011%. It costs $140,250 to operate this well each month, which including operator salary and amortization of equipment. Additional costs are $51.90 to process one cubic meter of oil and $15.50 to dispose one m3 of water. Oil price is expected to be $575.00 per m3. What is the expected loss in profit from March to April?