Definition of tangible cost

oil and gas drilling term meaning the cost of items that can be used over a period of time, such as casings, well fittings, land, and tankage, as distinguished from intangible costs such as drilling, testing, and geologist's expenses. In the most widely used limited partnership sharing arrangements, tangible costs are borne by the general partner (manager) while intangible costs are borne by the limited partners (investors), usually to be taken as tax deductions. In the event of a dry hole, however, all costs become intangibles.