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Simple English definitions for legal terms

cost depletion

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A quick definition of cost depletion:

Cost depletion is a way for oil and gas producers to recover their investment in a producing well. It works by deducting the investment proportionately over the life of the well as oil and gas are produced and sold. This means that the investment is recovered gradually over time, based on the current sales of oil and gas compared to the total anticipated sales from the property. It's like slowly getting your money back as you sell more and more oil and gas from the well.

A more thorough explanation:

Cost depletion is a method used by oil and gas producers to recover their investment in a producing well. It involves deducting the investment proportionately over the producing life of the well. This is different from percentage depletion, which is based on a percentage of the gross income from the sale of oil and gas.

For example, if an oil and gas producer invests $1 million in a well and the well has a producing life of 10 years, the producer can deduct $100,000 per year ($1 million divided by 10 years) from their income as oil and gas are produced and sold.

The formula for cost depletion takes into account the current unit sales of oil and gas and the total anticipated sales from the property. The investment is recovered ratably over the life of the reserves.

Overall, cost depletion allows oil and gas producers to recover their investment in a more accurate and fair way, based on the actual production and sales of oil and gas from the well.

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JumpySubsequentDolphin
21:35
no he’s literally like 8 and he fully just put his head on my bicep and slept
JumpySubsequentDolphin
21:35
he has since moved
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@SplitterusClitterus: me yesterday
gulc baby pls text me back... i miss you ...... :(
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i just went into a discord vc and yelled "YALL I JUST GOT INTO J.M. SCHOOL OF LAW"
22:24
people were getting excited :sob:
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then someone was like "what does jm stand for" and i was like .. well
AHHAHAHAHAHAHHAHAHAHAHAHAH
@JumpySubsequentDolphin: wait this is so cute, also where r u going
JOE MBIDEN
JumpySubsequentDolphin
22:39
@splitty Oregon!
oh yay for what thats so random
JumpySubsequentDolphin
22:45
haha my brother and sister in law live there
so cutie oregon is beatiful
soyalmondoatmilk
8:38
good morning! hoping waves will come our wave today
8:42
GW wave today?
8:57
There’s someone I found on here with the username threeoutchange and if my understanding is correct that’s a reference to the debut album by a pretty cool 90s-00s Japanese band called Supercar. I geeked a little
8:57
It could just be a baseball reference I don’t get though lol
Dkk
9:00
@renard99: also, the same band that does a song in the anime Eureka 7 which I watched when I was like idk, 12
9:00
Yeah! They are pretty good. Three Out Change is an awesome J-rock record
Dkk
9:01
I will probably not listen to them more but fun fact. Really random to start the day. An omen that the waves will be very random today.
Dkk
9:03
Fuck, reading the wikipedia now. Literal last song they did before they broke up was Storywriter. Wow.
9:05
That one is a masterpiece
9:05
My favorite song by them is Recreation
glovediedthisishismom
9:05
snowing
Dkk
9:07
@renard99: man, hard to find.
Dkk
9:07
@glovediedthisishismom: Congrats on the snow.
Dkk
9:16
@renard99: Poetic and nice.
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