Percentage Depletion | definition

One of the two calculation methodologies allowed by the IRS for calculating the depletion allowance on oil and gas mineral and royalty production. Generally, this allowance is calculated by multiplying 15% times the gross value of the annual production, but is limited to certain levels of production. You can read more at Mineral Web’s Depletion Allowance Article.

Return to the Glossary of P Terms or the Index of Oil & Gas Terms to search the oilfield glossary