Glossary

Development costs:  Costs incurred to obtain access to proved reserves and to provide facilities for extracting, treating, gathering, and storing the oil and gas. More specifically, development costs, depreciation and applicable operating costs of support equipment and facilities, and other costs of development activities, are costs incurred to:

• Gain access to and prepare well locations for drilling, including surveying well locations for the purpose of determining specific development drilling site; clearing ground; draining; road building; and relocating public roads, gas lines, and power lines to the extent necessary in developing the proved reserves.
• Drill and equip development wells, development-type stratigraphic test wells, and service wells, including the costs of platforms and of well equipment such as casing, tubing, pumping equipment, and the well head assembly.
• Acquire, construct, and install production facilities such as lease flow lines, separators, treaters, heaters, manifolds, measuring devices, production storage tanks, natural gas cycling and processing plants, and utility waste disposal systems.
• Provide improved recovery systems.