Financial research concept

Upstream DD&A per BOE: Oil and Gas Depletion Cost Explained

Upstream DD&A per BOE allocates depreciation, depletion, and amortization across oil and gas production, helping investors connect capitalized asset costs with current output.

By Lee BaileyPublished Sep 25, 2026

Research context

See what supports this page, how current it is, and where comparable or historical context is available.

Research date: Sep 25, 2026Use the dated article and cited sources for the definition, examples, and stated limitations.
Operating-model context: 18 connected conceptsPart of the reviewed Upstream E&P Economics; issuer definitions remain distinct where disclosed.
Company examples: 1 reviewed companyRelationships reflect supported examples, not a normalized cross-company KPI ranking.

EOG example
Why the rate moves
Investor use
Source
Part of the Upstream E&P Economics
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Upstream DD&A per BOE expresses depreciation, depletion, and amortization expense relative to oil and gas production.

For an exploration and production company, this is an important bridge between historical capitalized costs and current production.

EOG example

EOG reported 2025 DD&A of $9.92 per BOE, down from $10.57 in 2024. Of the 2025 rate, $9.34 per BOE related to oil and gas properties and $0.58 related to other property, plant, and equipment.

EOG uses the unit-of-production method for proved oil and gas properties. That means reserve estimates and production volumes directly affect the depletion rate.

Why the rate moves

DD&A per BOE can change because of:

drilling and acquisition costs;
reserve revisions;
field production profiles;
acquisitions and divestitures;
impairments;
the mix of producing properties; and
changes in the production denominator.

A lower DD&A rate does not necessarily mean current drilling became cheaper. It is an accounting rate tied to capitalized costs and reserve bases.

Investor use

Read DD&A per BOE beside Finding and Development Cost, Production Volume in BOE per Day, reserve additions, and current capital spending.

It helps explain accounting margin, but it is not a cash operating cost or a direct estimate of maintenance capital.

Source

EOG Resources 2025 Form 10-K

Part of the Upstream E&P Economics

Connect realized pricing, per-BOE revenue and costs, reserve development, PUD conversion, and standardized reserve value to understand exploration and production economics.

Browse the full operating model in Company Analysis →

Where this concept fits

Operating cost and per-unit profitabilityCurrent relationship
Lifting cost frames field-level production expense, GP&T cost captures processing and delivery, and DD&A per BOE allocates capitalized asset costs across production. Composite operating income per BOE then shows the resulting issuer-defined per-unit operating profitability after the included cost base.
Lifting Cost Operating Income per BOEUpstream DD&A per BOECurrent conceptGP&T Cost per BOE
Commodity realizations and revenue per BOE
Crude and natural-gas benchmark differentials plus NGL realization relative to WTI show how market and location effects shape pricing, while composite operating revenue per BOE combines those realizations with production mix into one issuer-level revenue measure.
Operating Revenue per BOE Oil Realization Differential Gas Realization Differential NGL Realization % of WTI
Reserve renewal, development capital, and standardized value
Reserve replacement and finding-and-development cost connect depletion with reserve renewal. Developed and undeveloped reserves show development status, PUD conversion volume and capital cost show execution, and future production and development costs feed the standardized discounted reserve-value calculation.
Finding and Development Cost Reserve Replacement Ratio Future Development Costs Future Production Costs Proved Developed Reserves Proved Undeveloped Reserves PUD Conversion Capital Cost PUD Conversion Volume Standardized Measure Discount Oil & Gas Standardized Measure

See It in Company Research

These companies are examples of how the concept is reported or discussed in public filings. Definitions can differ by issuer; these links open company research rather than a normalized metric comparison.

EOGOpen operating-model research →17 of 18 reviewed concepts in Upstream E&P EconomicsOperating cost and per-unit profitability3 of 4 bridge concepts supportedContinue through this bridge:GP&T Cost per BOE Operating Income per BOE

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