4. OIL AND NATURAL GAS PROPERTIES

The property, plant and equipment, net balances consist of:

December 31,		2022			2021
Oil and natural gas properties:
Evaluated (subject to depletion)	$	347,541,801		$	110,155,103
Unproved and unevaluated (not subject to depletion)		42,866,767			24,987,312
Total oil and gas properties		390,408,568			135,142,415
Accumulated depreciation, depletion, and amortization		(87,993,495	)		(25,911,025	)
Oil and gas properties, net	$	302,415,073		$	109,231,390

The Company recognized depletion and depreciation of $62,082,471 during the year ended December 31, 2022 (December 31, 2021 - $23,497,715). The depletion per barrel of oil equivalent ("BOE") produced was an average of $16.18 for the year ended December 31, 2022 (December 31, 2021 - $15.66).

The unproved and unevaluated property costs not subject to depletion as of December 31, 2022 and the year in which these costs were incurred, are as follows:

Description		2022		2021		2020		2019 and prior		Total
Costs incurred for:
Property acquisition	$	2,244,517	$	4,300,745	$	-	$	1,243,615	$	7,788,877
Exploration		1,635,842		1,222,509		-		-		2,858,351
Development		32,219,539		-		-		-		32,219,539
Total unproved and unevaluated (not subject to depletion)	$	36,099,898	$	5,523,254	$	-	$	1,243,615	$	42,866,767

Property acquisition costs are costs incurred to purchase, lease or otherwise acquire oil and natural gas properties, but may also include broker and legal expenses, geological and geophysical expenses and capitalized internal costs associated with developing oil and natural gas prospects on these properties.

Property acquisition costs incurred that remain in unproved and unevaluated property as at December 31, 2022 are mainly related to the Company's in progress development of wells in both the Giddings and the Hawkville fields. The Company believes that the majority of these unproved costs will become subject to depletion within the next two to three years by proving up reserves relating to the acreage through exploration and development activities, by impairing the acreage that will expire before the Company can explore or develop it further or by determining that further exploration and development activity will not occur.

Costs excluded from depletion also include those costs associated with exploration and development wells in progress or awaiting completion at year-end. These costs are transferred into the depletion base on an ongoing basis as these wells are completed and proved reserves are established or confirmed. The Company anticipates that the majority of the costs associated with these wells in progress at December 31, 2022 will be transferred to the amortization base during 2023. Unproved and unevaluated property costs for exploration and development wells incurred in years prior to 2022 are costs related to the advanced preparation for wells that the Company intends to drill in the future.