Restoration Cost: The restoration cost per million barrels of oil extracted is $9,800.

Xplorer extracted 270 million barrels of oil. Total restoration cost = $9,800 per million barrels ×
270 million barrels = $2,646,000
Dismantling Cost: The dismantling cost of the drilling equipment is $31 million on 30
September 2013. To find the present value of this cost:
Future value = $31 million
Discount rate (r) = 8%
Number of periods (n) = 4 years (from 2009 to 2013)
Present value = Future value × Present value factor = $31,000,000 × 0.68 = $21,080,000
This is the dismantling provision at 1 October 2008.
To calculate the finance cost increase by 30 September 2009: Finance cost increase =
Dismantling provision at 1 October 2008 × (1 + r) = $21,080,000 × (1 + 0.08) ≈ $22,766,400
Total provision = Restoration cost + Finance cost increased dismantling provision =
$2,646,000 + $22,766,400 = $25,412,400