EXAMPLE Unproved Property Inclusion and Exclusion Costs incurred by Tyler Company on oil and gas properties located in the United States asd December 31, 2011, were as follows: $ 40,000 Proved property costs.... 70,000 Unproved property costs Nondrilling exploration costs, proved properties 80,000 Nondrilling exploration costs, unproved properties... 100,000 Drilling costs, proved properties. 400,000 Wells-in-progress, unproved properties. 600,000 Dry holes, unproved properties. 900,000 Total accumulated DD&A (490,000) Total capitalized costs, net of DD&A $1,700,000 In Other Data: Future development costs.. $ 300,000 Future decommissioning costs (on future development projects) 400,000 Proved reserves, 12/31/11, bbl... 500,000 D Production during year, bbl.. 100,000 a. DD&A assuming all possible costs are included in the amortization base: Costs to Be Amortized Total net capitalized costs Plus: Future development costs Plus: Future decommissioning costs related to future development costs Total costs to amortize DD&A $2,400,000 500,000 bbl+100,000 bbl x 100,000 bbl = $400,000 $1,700,000 300,000 400,000 $2,400,000