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These excerpts taken from the DVN 10-K filed Feb 27, 2009. Lease
Operating Expenses (“LOE”)
2008 vs. 2007 LOE increased $389 million in 2008.
The largest contributor to this increase, as well as the
increase in LOE per Boe, was higher
per-unit
costs associated with new thermal heavy oil production from our
Jackfish operations in Canada as well as new oil production from
Brazil. As these large-scale projects are in the early phases of
production,
per-unit
operating costs are higher than the
per-unit
costs for our overall portfolio of producing properties. LOE
also increased $112 million due to our 6% growth in
production. Additionally, LOE increased $31 million due to
damages to certain of our facilities and transportation systems
caused by Hurricane Ike in the third quarter of 2008. These
hurricane damages also contributed to the increase in LOE per
Boe.
2007 vs. 2006 LOE increased $403 million in 2007.
The largest contributor to this increase was our 12% growth in
production, which caused an increase of $168 million.
Another key contributor to the LOE increase was the effects of
inflationary pressure driven by increased competition for field
services. Increased demand for these services continued to drive
costs higher for materials, equipment and personnel used in both
recurring activities as well as well-workover projects during
2007. Furthermore, changes in the exchange rate between the
U.S. and Canadian dollar also caused LOE to increase
$40 million.
Lease
Operating Expenses (“LOE”)
2008 vs. 2007 LOE increased $389 million in 2008.
The largest contributor to this increase, as well as the
increase in LOE per Boe, was higher
per-unit
costs associated with new thermal heavy oil production from our
Jackfish operations in Canada as well as new oil production from
Brazil. As these large-scale projects are in the early phases of
production,
per-unit
operating costs are higher than the
per-unit
costs for our overall portfolio of producing properties. LOE
also increased $112 million due to our 6% growth in
production. Additionally, LOE increased $31 million due to
damages to certain of our facilities and transportation systems
caused by Hurricane Ike in the third quarter of 2008. These
hurricane damages also contributed to the increase in LOE per
Boe.
2007 vs. 2006 LOE increased $403 million in 2007.
The largest contributor to this increase was our 12% growth in
production, which caused an increase of $168 million.
Another key contributor to the LOE increase was the effects of
inflationary pressure driven by increased competition for field
services. Increased demand for these services continued to drive
costs higher for materials, equipment and personnel used in both
recurring activities as well as well-workover projects during
2007. Furthermore, changes in the exchange rate between the
U.S. and Canadian dollar also caused LOE to increase
$40 million.
Lease Operating Expenses (“LOE”) 2008 vs. 2007 LOE increased $389 million in 2008. The largest contributor to this increase, as well as the increase in LOE per Boe, was higher per-unit costs associated with new thermal heavy oil production from our Jackfish operations in Canada as well as new oil production from Brazil. As these large-scale projects are in the early phases of production, per-unit operating costs are higher than the per-unit costs for our overall portfolio of producing properties. LOE also increased $112 million due to our 6% growth in production. Additionally, LOE increased $31 million due to damages to certain of our facilities and transportation systems caused by Hurricane Ike in the third quarter of 2008. These hurricane damages also contributed to the increase in LOE per Boe. 2007 vs. 2006 LOE increased $403 million in 2007. The largest contributor to this increase was our 12% growth in production, which caused an increase of $168 million. Another key contributor to the LOE increase was the effects of inflationary pressure driven by increased competition for field services. Increased demand for these services continued to drive costs higher for materials, equipment and personnel used in both recurring activities as well as well-workover projects during 2007. Furthermore, changes in the exchange rate between the U.S. and Canadian dollar also caused LOE to increase $40 million. Lease Operating Expenses (“LOE”) 2008 vs. 2007 LOE increased $389 million in 2008. The largest contributor to this increase, as well as the increase in LOE per Boe, was higher per-unit costs associated with new thermal heavy oil production from our Jackfish operations in Canada as well as new oil production from Brazil. As these large-scale projects are in the early phases of production, per-unit operating costs are higher than the per-unit costs for our overall portfolio of producing properties. LOE also increased $112 million due to our 6% growth in production. Additionally, LOE increased $31 million due to damages to certain of our facilities and transportation systems caused by Hurricane Ike in the third quarter of 2008. These hurricane damages also contributed to the increase in LOE per Boe. 2007 vs. 2006 LOE increased $403 million in 2007. The largest contributor to this increase was our 12% growth in production, which caused an increase of $168 million. Another key contributor to the LOE increase was the effects of inflationary pressure driven by increased competition for field services. Increased demand for these services continued to drive costs higher for materials, equipment and personnel used in both recurring activities as well as well-workover projects during 2007. Furthermore, changes in the exchange rate between the U.S. and Canadian dollar also caused LOE to increase $40 million. These excerpts taken from the DVN 10-K filed Jun 9, 2008. Lease
Operating Expenses (“LOE”)
2007 vs. 2006 LOE increased $403 million in 2007.
The largest contributor to this increase was our 12% growth in
production, which caused an increase of $168 million.
Another key contributor to the LOE increase was the continued
effects of inflationary pressure driven by increased competition
for field services. Increased demand for these services continue
to drive costs higher for materials, equipment and personnel
used in both recurring activities as well as well-workover
projects. Furthermore, changes in the exchange rate between the
U.S. and Canadian dollar also caused LOE to increase
$40 million.
2006 vs. 2005 LOE increased $181 million in 2006
largely due to higher commodity prices. Commodity price
increases in 2005 and the first half of 2006 contributed to
industry-wide inflationary pressures on materials and personnel
costs. Additionally, the availability of higher commodity prices
contributed to our decision to perform more well workovers and
maintenance projects to maintain or improve production volumes.
Commodity price increases also caused operating costs such as ad
valorem taxes, power and fuel costs to rise.
A higher Canadian-to-U.S. dollar exchange rate in 2006
caused LOE to increase $34 million. LOE also increased
$33 million due to the June 2006 Chief acquisition and the
payouts of our carried interests in Azerbaijan in the last half
of 2006. The increases in our LOE were partially offset by a
decrease of $82 million related to properties that were
sold in 2005.
The factors described above were also the primary factors
causing LOE per Boe to increase during 2006. Although we
divested properties in 2005 that had higher
per-unit
operating costs, the cost escalation largely
Table of Contents
related to higher commodity prices and the weaker
U.S. dollar had a greater effect on our per unit costs than
the property divestitures.
Lease Operating Expenses (“LOE”) 2007 vs. 2006 LOE increased $403 million in 2007. The largest contributor to this increase was our 12% growth in production, which caused an increase of $168 million. Another key contributor to the LOE increase was the continued effects of inflationary pressure driven by increased competition for field services. Increased demand for these services continue to drive costs higher for materials, equipment and personnel used in both recurring activities as well as well-workover projects. Furthermore, changes in the exchange rate between the U.S. and Canadian dollar also caused LOE to increase $40 million. 2006 vs. 2005 LOE increased $181 million in 2006 largely due to higher commodity prices. Commodity price increases in 2005 and the first half of 2006 contributed to industry-wide inflationary pressures on materials and personnel costs. Additionally, the availability of higher commodity prices contributed to our decision to perform more well workovers and maintenance projects to maintain or improve production volumes. Commodity price increases also caused operating costs such as ad valorem taxes, power and fuel costs to rise. A higher Canadian-to-U.S. dollar exchange rate in 2006 caused LOE to increase $34 million. LOE also increased $33 million due to the June 2006 Chief acquisition and the payouts of our carried interests in Azerbaijan in the last half of 2006. The increases in our LOE were partially offset by a decrease of $82 million related to properties that were sold in 2005. The factors described above were also the primary factors causing LOE per Boe to increase during 2006. Although we divested properties in 2005 that had higher per-unit operating costs, the cost escalation largely
Table of Contentsrelated to higher commodity prices and the weaker U.S. dollar had a greater effect on our per unit costs than the property divestitures. These excerpts taken from the DVN 10-K filed Feb 28, 2008. Lease
Operating Expenses (“LOE”)
2007 vs. 2006 LOE increased $403 million in 2007.
The largest contributor to this increase was our 12% growth in
production, which caused an increase of $168 million.
Another key contributor to the LOE increase was the continued
effects of inflationary pressure driven by increased competition
for field services. Increased demand for these services continue
to drive costs higher for materials, equipment and personnel
used in both recurring activities as well as well-workover
projects. Furthermore, changes in the exchange rate between the
U.S. and Canadian dollar also caused LOE to increase
$40 million.
2006 vs. 2005 LOE increased $181 million in 2006
largely due to higher commodity prices. Commodity price
increases in 2005 and the first half of 2006 contributed to
industry-wide inflationary pressures on materials and personnel
costs. Additionally, the availability of higher commodity prices
contributed to our decision to perform more well workovers and
maintenance projects to maintain or improve production volumes.
Commodity price increases also caused operating costs such as ad
valorem taxes, power and fuel costs to rise.
A higher Canadian-to-U.S. dollar exchange rate in 2006
caused LOE to increase $34 million. LOE also increased
$33 million due to the June 2006 Chief acquisition and the
payouts of our carried interests in Azerbaijan in the last half
of 2006. The increases in our LOE were partially offset by a
decrease of $82 million related to properties that were
sold in 2005.
The factors described above were also the primary factors
causing LOE per Boe to increase during 2006. Although we
divested properties in 2005 that had higher
per-unit
operating costs, the cost escalation largely
Table of Contents
related to higher commodity prices and the weaker
U.S. dollar had a greater effect on our per unit costs than
the property divestitures.
Lease Operating Expenses (“LOE”) 2007 vs. 2006 LOE increased $403 million in 2007. The largest contributor to this increase was our 12% growth in production, which caused an increase of $168 million. Another key contributor to the LOE increase was the continued effects of inflationary pressure driven by increased competition for field services. Increased demand for these services continue to drive costs higher for materials, equipment and personnel used in both recurring activities as well as well-workover projects. Furthermore, changes in the exchange rate between the U.S. and Canadian dollar also caused LOE to increase $40 million. 2006 vs. 2005 LOE increased $181 million in 2006 largely due to higher commodity prices. Commodity price increases in 2005 and the first half of 2006 contributed to industry-wide inflationary pressures on materials and personnel costs. Additionally, the availability of higher commodity prices contributed to our decision to perform more well workovers and maintenance projects to maintain or improve production volumes. Commodity price increases also caused operating costs such as ad valorem taxes, power and fuel costs to rise. A higher Canadian-to-U.S. dollar exchange rate in 2006 caused LOE to increase $34 million. LOE also increased $33 million due to the June 2006 Chief acquisition and the payouts of our carried interests in Azerbaijan in the last half of 2006. The increases in our LOE were partially offset by a decrease of $82 million related to properties that were sold in 2005. The factors described above were also the primary factors causing LOE per Boe to increase during 2006. Although we divested properties in 2005 that had higher per-unit operating costs, the cost escalation largely
Table of Contentsrelated to higher commodity prices and the weaker U.S. dollar had a greater effect on our per unit costs than the property divestitures. | EXCERPTS ON THIS PAGE:
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