New Discovery Gross Production Tax Refund

New discovery oil well – Must be at least one mile from the nearest oil well producing from the same formation; or drilling to a deeper formation that is more than one mile from an oil well producing from the same deeper formation.

 New discovery gas well – Must be a new gas well, which is not an off-pattern well, which is the first well completed in a common source of supply within a drilling and spacing unit and is at least two (2) miles from all existing gas wells which are completed in the same common source of supply. 

Qualifying wells will receive a refund equal to 6/7ths of the gross production tax paid.  This gross production tax exemption began on July 1, 1995 and will expire at June 30, 2012 unless extended by the legislature. 

Refunds will not be allowed if the average annual oil index price as calculated by the OTC exceeds $30/bbl, and if the average annual index price as calculated by the OTC for natural gas exceeds $5.00/MCF on an annual calendar year basis.  This price cap is effective for all refund periods after July 1, 2008.

Managing Member of Petroleum Accounting Consultants discusses New Discovery Gross Production tax refunds at a recent Oklahoma Marginal Well Commission seminar.  
 

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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.

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