The Depreciation Wave
Across 2 sectors, 3 filers are signaling rising cost pressure. Visible since 2025Q2, with activity continuing through 2026Q1. Almost entirely a cost story (93%). One disclosure notes "higher DD&A of $728 million and higher production and operating expenses." Continuing to spread to more sectors.
Energy and mining producers are experiencing simultaneous increases in depreciation, depletion, and amortization expenses driven by higher production volumes, newly capitalized assets coming into service, and acquisitions that raise asset bases and depreciation rates.
DISTINCT NEW FILERS PER QUARTER
✦ WHAT THE DIFF CAUGHT
Discourse is shifting from backward-looking cost absorption (higher volumes, asset placements) to forward-looking full-year guidance anchored on expanded asset bases and acquisition integration.
REPRESENTATIVE SIGNAL FROM FILINGS
“higher DD&A of $728 million and higher production and operating expenses”
DD&A expenses increased by $728 million in the six-month period, partly from the Marathon Oil acquisition.
“Consolidated DD&A was higher in second-quarter 2025 than second-quarter 2024 primarily as a result of higher sales volumes”
Consolidated DD&A increased from $509 million in Q2 2024 to $668 million in Q2 2025 due to higher sales volumes.
DRIVERS