Natural gas and natural gas liquids sales. Natural gas and NGL sales increased for the quarter ended September 30, 2017 as compared to the same period for 2016. Higher commodity prices and higher production volumes, largely driven by new wells in the Haynesville play, were primarily responsible for the increase in our natural gas and NGL revenues. Mineral-and-royalty-interest production accounted for 50.6% and 58.4% of our natural gas volumes for the quarters ended September 30, 2017 and 2016, respectively.
Gain (loss) on commodity derivative instruments. During the third quarter of 2017, we recognized $9.5 million of losses from oil commodity contracts, which included cash received of $4.0 million, compared to recognized gains of $3.7 million in the same period of 2016. During the third quarter of 2017, we recognized $0.2 million of gains from natural gas commodity contracts, which included cash received of $1.0 million, compared to recognized gains of $4.1 million in the same period of 2016.
Lease bonus and other income. When we lease our mineral interests, we generally receive an upfront cash payment, or a lease bonus. Leasing activity in the Anadarko and Delaware Basins made up the majority of lease bonus in the third quarter of 2017, while a substantial portion of third quarter 2016 activity came from the Wolfcamp and Marcellus trends.
Operating and Other Expenses
Lease operating expense. Lease operating expense includes normally recurring expenses associated with our non-operated working interests necessary to produce hydrocarbons from our oil and natural gas wells, as well as certain nonrecurring expenses, such as well repairs. Lease operating expense decreased for the quarter ended September 30, 2017 as compared to the same period in 2016, primarily due to decreased operating costs in fields reaching economic limits and fewer remedial projects initiated by our operators. These cost decreases were partially offset by increased operating costs in the Haynesville play.
Production costs and ad valorem taxes. Production taxes include statutory amounts deducted from our production revenues by various state taxing entities. Depending on the regulations of the states where the production originates, these taxes may be based on a percentage of the realized value or a fixed amount per production unit. This category also includes the costs to process and transport our production to applicable sales points. Ad valorem taxes are jurisdictional taxes levied on the value of oil and natural gas minerals and reserves. Rates, methods of calculating property values, and timing of payments vary between taxing authorities. For the quarter ended September 30, 2017, production costs and ad valorem taxes increased from the quarter ended September 30, 2016, generally as a result of higher oil and condensate and natural gas prices and natural gas production volumes. In addition, the 2016 amount includes $2.7 million of lawsuit settlement proceeds related to improper cost deductions.
Exploration expense. Exploration expense typically consists of dry-hole expenses, delay rentals, and geological and geophysical costs, including seismic costs, and is expensed as incurred under the successful efforts method of accounting. Exploration expense increased slightly for the three months ended September 30, 2017, as compared to the same period in 2016. The 2017 and 2016 expense represents delay rental costs incurred to extend working interest leases beyond the original lease term.
Depreciation, depletion, and amortization. Depletion is an estimate of the amount of cost basis of oil and natural gas properties attributable to the volume of hydrocarbons extracted during a period, calculated on a units-of-production basis. Estimates of proved developed producing reserves are a major component of the calculation of depletion. We adjust our depletion rates semi-annually based upon mid-year and year-end reserve reports, except when circumstances indicate that there has been a significant change in reserves or costs. Depreciation, depletion, and amortization increased slightly for the quarter ended September 30, 2017 as compared to the same period in 2016, primarily due to the impact of higher production partially offset by lower depletion rates.
Impairment of oil and natural gas properties. Individual categories of oil and natural gas properties are assessed periodically to determine if the net book value for these properties has been impaired. Management periodically conducts an in-depth evaluation of the carrying amounts of property acquisitions, successful exploratory wells, development activity, undeveloped leasehold, and mineral interests to identify impairments. There were no impairments for the quarters ended September 30, 2017 or 2016.
General and administrative. General and administrative expenses are costs not directly associated with the production of oil and natural gas and includes expenses such as the cost of employee salaries and related benefits, office expenses, and fees for professional services. For the quarter ended September 30, 2017, general and administrative expenses increased as