INTANGIBLE CAPITAL COSTS Clause Samples
The Intangible Capital Costs clause defines and governs the treatment of non-physical expenditures incurred during the development of a project, such as engineering, legal fees, or permits, which do not result in a tangible asset. Typically, this clause outlines which costs qualify as intangible, how they are to be accounted for, and may specify their eligibility for certain tax deductions or cost recovery mechanisms. Its core function is to ensure clarity and consistency in the financial treatment of these expenditures, thereby facilitating accurate accounting and compliance with relevant regulations.
INTANGIBLE CAPITAL COSTS. The intangible capital costs will be the ongoing costs incurred in the purchase of movable goods and services directly related to Oil Operations and will be recognised as expenses at the moment they are incurred. These costs/expenses will include the following:
(a) the costs of aeromagnetic, airborne gravimetry, topographical, geological, geophysical and geochemical studies, costs of interpretation and reinterpretation of technical data, labour required for exploration and similar costs:
(b) drilling costs of Exploration ▇▇▇▇▇ and Evaluation ▇▇▇▇▇: costs of services provided to drill Development and Evaluation ▇▇▇▇▇, chemical products, leasing costs (of helicopters, lighters, boats, tugs etc.), transport, warehousing facilities, accommodation, technical services for mud control, Well geology, controlled directional drilling of ▇▇▇▇▇, diving service, mud control, Well geology tests, hardening and related costs;
(c) drilling costs of Development ▇▇▇▇▇ such as mobilisation and demobilisation of platforms and drilling equipment, drilling contracts and hire of platforms and drilling equipment, labour for platform facilities and infrastructure, fuel, water, drivers, drill bits, drilling tubes, hire of equipment, production test equipment, Christmas tree for production and mud tests and components, chemical products, hire costs (of helicopters, lighters, boats, tugs, etc.), transport, warehousing facilities, accommodation, technical services for mud control, Well location geology, directional drilling of ▇▇▇▇▇, diving service, production and evaluation test, culmination and supervision;
(d) the acquisition or purchase costs of goods and services such as transport costs, operating costs, verification of equipment, costs of on site installation, maintenance costs and fuel costs;
(e) general services (electrical registers, vertical seismic profile [VSP], mud control, sample collection, Well geology tests, hardening, production test, supervision and similar costs), delineation services, all leasing of heavy engineering machinery and other expenses incurred abroad;
(f) materials, reconstruction of access roads and other types of roads and other intangible goods for construction, public services and construction support; and
(g) other Exploration Costs, auxiliary or temporary installations with a working life of less than one (1) Year.