LEARN
What is Lease Operating Expense (LOE)?
Definition
Lease Operating Expense (LOE) refers to the costs associated with operating producing oil and gas wells and the facilities that support them. LOE can include field operations, labor, electricity, chemicals, repairs, maintenance, water handling, compression, equipment, and other costs associated with keeping producing properties operating. The specific costs included in LOE can vary by property, operator, and accounting structure. LOE generally relates to operating existing producing assets rather than the original cost of acquiring, drilling, or completing a well.
Practical questions
- What does it cost to operate this well?
- Which wells have the highest operating expenses?
- Why did LOE increase this month?
- Which expense categories are driving the increase?
- Are certain costs recurring or one-time?