This excerpt taken from the MMR 10-Q filed May 8, 2008.
Production and delivery costs. The following table reflects our production and delivery costs for the three months ended March 31, 2008 and 2007 (in millions, except per Mcfe amounts):
Our higher lease operating expense reflects increased production, including the amounts associated with the 2007 oil and gas property acquisition. The 11 percent decrease in the per Mcfe amount for lease operating expense reflects our ability to leverage our increased scale of operations through better pricing on materials and services. We are continuing to evaluate alternatives to lower our operating costs. Our workover costs during the first quarter of 2008 primarily reflect remedial operations at the King of the Hill well at High Island Block 131, South Timbalier Block 148 and Ship Shoal Block 58.
During 2007, our workover costs were related primarily to work at Eugene Island Block 97, the Eugene Island Block 193 C-1 and C-2 wells and efforts to restore production from the Cane Ridge well at Louisiana State Lease 18055.
Our insurance costs reflect incremental costs for coverage of the oil and gas properties acquired in 2007. Increased production taxes over the prior year reflect the commencement of production from the Point Chevreuil and Laphroaig wells located in St. Mary, Parish, Louisiana.