Step 1: Think in terms of a single produced barrel:
Consider the reservoir as a fixed size tank filled entirely with oil, since the rock does not compress, there is no water influx to take up space, and connate water effects are negligible. Take one STB of oil from this tank. At the initial pressure, that one STB occupies Boi reservoir barrels of space inside the tank. As the reservoir is produced and pressure falls, but stays above the bubble point, every STB of oil remaining in the tank expands, so it now occupies Bo reservoir barrels instead of Boi reservoir barrels, since Bo is larger than Boi at the lower pressure.
Step 2: Work out how much extra room each STB creates by expanding:
Because the tank size cannot change, the extra reservoir volume that each STB of remaining oil creates simply by expanding is $(B_o - B_{oi})$ reservoir barrels. This extra volume is exactly what makes room for oil to be produced without changing the total volume of the tank. So the volume made available for production, expressed as a fraction of the current reservoir volume occupied per STB, which is Bo, is $(B_o - B_{oi})/B_o$.
Step 3: Recognize this fraction as the recovery factor:
Since every STB behaves the same way, this fraction $(B_o - B_{oi})/B_o$ is exactly the fraction of the original oil in place that ends up produced, which is the recovery factor RF. This can also be written as $RF = 1 - B_{oi}/B_o$, which is the same expression obtained from a full material balance, confirming the result is consistent.
Step 4: Plug in the numbers and compute:
With $B_{oi} = 1.24$ RB/STB and $B_o = 1.25$ RB/STB: $B_o - B_{oi} = 1.25 - 1.24 = 0.01$ RB/STB. Dividing by Bo: $RF = 0.01 / 1.25 = 0.008$.
Final Answer:
\[ \boxed{0.008} \]