Gross Production Tax Exemption for Deep Wells in Oklahoma

1995 Senate Bill 495 and 1994 Senate Bill 841 provide for a gross production tax exemption for deep wells drilled in Oklahoma.  The bills provide for a refund of 6% out of the total 7% gross production tax for production from wells deeper than 15,000 feet if spudded between July 1,1994 and June 30, 1997, wells deeper than 12,500 feet if drilled between July 1, 1997 and June 30, 2002.  If the well is spudded between July 1, 2002 and June 30, 2015, and is deeper than 12,500 feet, then the well is exempt for 28 to 60 months depending on the well’s depth.  The effective date of this bill is July 1, 1994 and is currently set to expire on June 30, 2015.

Price Caps

Refunds will not be allowed if weighted average price of Oklahoma oil exceeds $30/bbl and the weighted average wellhead price of Oklahoma natural gas exceeds $5.00/MCF on an annual calendar year basis.

Gross Production Tax Refund Filing Deadline

Gross production tax refund claims for deep wells must be filed within 18 months of the date in which they are eligible to be claimed.

Deep Well Refund Limit

For the fiscal years ending June 30, 2009 through June 30, 2012 the total amount to be refunded will be limited to $25,000,000 per year.  Recently companies have been receiving around 50 cents on the dollar for their deep well refund claims.

Oklahoma Deep Well Gross Production Tax Exemption Seminar

Contact Us Now!

    Please check the services requested.


"I have been extremely pleased with results Petroleum Accounting Consultants, PLLC has obtained for my company. The professional and knowledgeable staff obtained a substantial refund of tax dollars that we would not have had the time or the expertise to recover ourselves.

In order for them to perform their review it took less than one hour of my time. All that was required of me was to show their staff where the well files were and they took it from there. They completed all the necessary filings with the state agency's to obtain the refund and all I had to do was sign the refund checks.

It has been a great pleasure to deal with Petroleum Accounting Consultants, PLLC and we will continue to use their services. I would strongly recommend that all oil and gas operators contact Petroleum Accounting Consultants, PLLC to perform a review of their severance taxes."

Centaur Resources, Inc. - Ernest G. Brewer Jr.

Click Here for More Testimonials

Featured Service

Severance Taxes

An cost effective alternative to hiring your own accounting staff to complete your severance tax reporting requirements is to hire Petroleum Accounting Consultants, PLLC.

Our consultants can complete your severance tax returns and save you money on salary expense and payroll tax expense. More importantly our consultants are familiar with the various severance tax incentives offered by oil and gas producing states and can take advantage of them, which will save you money on your severance taxes.

Click Here for More Services