Oil & gas: same structure as upstream extraction
The oil & gas sector broadly uses the exact same cost structure as upstream oil & gas extraction - per-well drilling cost depreciated against reserves, and natural production decline.
Same structure as upstream oil & gas extraction
The oil & gas sector uses the EXACT SAME ten-category structure as upstream oil & gas extraction - no purchased material, drilling cost depreciated against each well's own reserves, natural production decline over time.
See the Oil & gas extraction guide for the full ten categories and the industry's two most important structural features: drilling cost and the production decline curve.
Related guides
- Oil & gas extraction cost breakdown: well drilling cost and natural decline
Costing upstream oil and gas extraction - no purchased material like mining, plus two features unique to this industry: per-well drilling cost and natural production decline over time.
- The Ten Manufacturing Cost Categories, in Production Order
The ten cost categories Costdown uses to price a product — material, machinery, labor, tooling, scrap, rework, outsourced processing, packaging, logistics, factory overhead — with the formula and a worked example for each.
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