Oil & Gas
Development Well — Capitalized Cost
Capitalizing the drilling and completion costs for a development well in a proven field.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Development Assets — Oil & Gas Properties | Asset (+) | 25,000,000.00 | - |
| Cash / Accounts Payable | Asset/Liability (-) | - | 25,000,000.00 |
💡 Accountant's Note
Development wells are drilled after commercial reserves are confirmed. Their costs are capitalized to the oil and gas property and depleted over the proved developed reserves using the Units of Production (UOP) method.
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