Lease operating expenses. Total LOE expressed on a per Boe basis increased approximately 6% from $9.98 per Boe for the nine months ended September 30, 2021, to $10.55 per Boe for the nine months ended September 30, 2022 primarily due an increase to labor costs and industry wide inflationary pressures. Total lease operating expenses increased approximately 34% from $22,634,259 for the nine months ended September 30, 2021, to $30,283,706 for the nine months ended September 30, 2022 primarily due to a 27% increase to production of 602,535 Boe and the higher per Boe costs mentioned above
Gathering, transportation and processing costs. Our total gathering, transportation and processing costs decreased by approximately 36% from $2,883,348 for the nine months ended September 30, 2021 to $1,846,247 for the nine months ended September 30, 2022, due to costs classified as a reduction to oil and natural gas sales revenues, due to the processing entity beginning to take control of transportation at the wellhead beginning May 1, 2022. Total gathering, transportation and processing costs expressed on a per Boe basis decreased approximately 50% from $1.27 per Boe for the nine months ended September 30, 2021 to $0.64 per Boe for the nine months ended September 30, 2022 due to increased Boe as well as the change in cost recognition effective May 1, 2022.
Ad valorem taxes. Our ad valorem taxes increased approximately 45% from $2,144,800 for the nine months ended September 30, 2021 to $3,100,578 for the nine months ended September 30, 2022 primarily due to the increase in taxed commodity prices from the prior year. Expressed on a per Boe basis, these costs increased approximately 14% from $0.95 per Boe for the nine months ended September 30, 2021 to $1.08 for the nine months ended September 30, 2022.
Oil and natural gas production taxes. Production taxes as a percentage of oil and natural gas sales increased slightly to 4.8% for the nine months ended September 30, 2022 compared to 4.6% for the same period in 2021. We expect these rates to stay relatively steady.
Depreciation, depletion and amortization. Our depreciation, depletion and amortization expense increased by $8,161,185 to $34,854,993 for the nine months ended September 30, 2022, compared to $26,693,808 during the same period in 2021 due to higher 2022 production volumes. Average depreciation, depletion and amortization increased to $12.15 per Boe for the nine months ended September 30, 2022 from $11.77 per Boe for the nine months ended September 30, 2021 due to the increased total estimated costs of property.
Asset retirement obligation accretion. Accretion of AROs increased $57,023 to $617,685 for the nine months ended September 30, 2022, compared to $560,662 for the nine months ended September 30, 2021 due to new drilling and from the Stronghold Acquisition.
Operating lease expense. Operating lease expense decreased $189,126 to $250,770 for the nine months ended September 30, 2022, compared to $439,896 for the nine months ended September 30, 2021 due to the change in treatment of the compressor leases beginning April 1, 2021.
General and administrative expense. General and administrative expense increased to $18,748,427 for the nine months ended September 30, 2022 compared to $11,103,394 for the nine months ended September 30, 2021. Within this change, we isolate share-based compensation, which increased to $4,964,188 for the nine months ended September 30, 2022 compared to $1,484,730 for the nine months ended September 30, 2021, primarily as the result of grants of equity awards in 2021 and 2022 pursuant to the 2021 Plan. For the nine months ended September 30, 2022, general and administrative expenses excluding share-based compensation increased $4,165,575 due to approximately $1.3 million in transaction costs primarily associated with the Stronghold Acquisition, approximately $2.4 million increased bonus compensation accruals and salaries and wages for new hires to support the Company’s growth, as well as increased insurance and software costs, offset by a reduction in general legal and other professional fees.
| | | | | | |
| | For The Nine Months |
| | Ended September 30, |
| | 2022 | | 2021 |
| | | | | | |
General and administrative expense (excluding share-based compensation) | | $ | 13,784,239 | | $ | 9,618,664 |
Share-based compensation | | | 4,964,188 | | | 1,484,730 |
General and administrative expense | | $ | 18,748,427 | | $ | 11,103,394 |
Interest expense. Interest expense increased $2,751,085 to $13,699,045 for the nine months ended September 30, 2022, compared to $10,947,960 for the nine months ended September 30, 2021 due to an increase in the weighted average year to date interest rate to 5.1% compared to 4.4% for the prior year.
Gain (loss) on derivative contracts. In the Statements of Operations, the total loss on derivative contracts decreased by approximately 97%, from $73,586,199 for the nine months ended September 30, 2021 to $2,201,970 for the nine months ended September 30, 2022. Underlying this overall change in loss were changes within the realized and unrealized portions of the derivative instruments. We