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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
NOTE 29. GAS AND OIL PRODUCING ACTIVITIES (UNAUDITED)
The aggregate amounts of costs capitalized forgas and oil producing activities, and related aggregate amounts of accumulated depletion
follow:
At December 31, 2006 2005
(millions)
Capitalized costs:
Proved properties $11,747 $9,929
Unproved properties 1,980 1,775
13,727 11,704
Accumulated depletion:
Proved properties 3,506 2,513
Unproved properties 144 109
3,650 2,622
Net capitalized costs $10,077 $9,082
Total Costs Incurred
The following costs were incurred in gas and oil producing activities:
Year Ended December 31, 2006 2005 2004
Total
United
States Canada Total
United
States Canada Total
United
States Canada
(millions)
Property acquisition costs:
Proved properties $87$87$— $118 $118 $— $20 $20 $ —
Unproved properties 171 165 6151 137 14 116 102
258 252 6269 255 14 136 122 14
Exploration costs 399 383 16 235 230 521319914
Development costs(1) 1,451 1,365 86 1,207 1,128 79 915 841 74
Total $2,108 $2,000 $108 $1,711 $1,613 $98 $1,264 $1,162 $102
(1) Development costs incurred for proved undeveloped reserves were $302 million, $284 million and $172 million for 2006, 2005 and 2004, respectively.
Results of Operations
We caution that the following standardized disclosures required by the FASB do notrepresent our results of operations based on our histor-
ical financial statements. In addition to requiring differentdeterminations of revenue and costs, the disclosuresexclude the impact of
interest expense and corporate overhead.
Year Ended December 31, 2006 2005 2004
Total U.S. Canada Total U.S. Canada Total U.S. Canada
(millions)
Revenue (net of royalties) from:
Sales to nonaffiliated companies $1,883 $1,749 $134 $1,499 $1,369 $130 $1,526 $1,297 $229
Transfers to other operations253 253 —268 268 —195195—
Total 2,136 2,002 134 1,767 1,637 130 1,721 1,492 229
Less:
Production (lifting) costs 552 510 42 443 406 37 394 309 85
Depreciation, depletion and
amortization 801 750 51 564 525 39 560 497 63
Income tax expense 285 271 14 283 264 19 29526629
Results of operations$498$471 $27 $477$442 $35 $472 $420 $52
102 DOMINION2006 Annual Report
C Capitalized osts