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Severance Tax: The state of Texas levies a severance tax on extracted oil, which in this case, totaled about $3,000 for the month.
Gathering and Transportation Fees: Moving oil from the wellhead to market involves costs such as trucking fees. Since the oil is transported via a central tank battery, trucks pick up the oil roughly every few days, incurring transportation expenses.
These costs are part of a broader category known as Lease Operating Expenses (LOE).
Operating Expenses Breakdown
The lease operating expenses encompass costs necessary to keep the well operational:
- Field Management: Salaries for pumpers or lease operators managing the wells.