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Oil & Gas Tax

Oil and Gas Production Tax
Title 9, Chapter 17, Article 1, Sections 25-35

Tax RateDescription
1%Production from wells permitted from July 1, 1996, through June 30, 2002, for five years from first production.
1.66%Gross proceeds from offshore production from depths greater than 8,000 feet below mean sea level.
2%All other production.

Oil and Gas Reduced Privilege Tax
Title 40, Chapter 20 Article 1, Section 2(a)(6)

Tax RateDescription
2%Wells normally qualifying for the 4% privilege tax rate and permitted from July 1, 1996, through July 1, 2002, for five years from first production.
3%Wells normally qualifying for the 6% privilege tax rate and permitted from July 1, 1996, through July 1, 2002, for five years from first production.

Oil and Gas Privilege Tax
Title 40, Chapter 20 Article 1 & 1a, Sections 2 & 21, Respectively

Tax RateDescription
4%
  • Offshore wells producing 200 MCF or 25 BBLs or less per day at depths less than 8,000 feet.
  • Oil wells producing 25 BBLs or less per day.
  • Gas wells producing 200 MCF or less per day.
  • Incremental production from qualified enhanced recovery projects and supplemental enhanced recovery projects approved by the State Oil and Gas Board.
3.65%Gross proceeds from offshore production from depths greater than 8,000 feet below mean sea level.
6%
  • Offshore wells producing greater than 200 MCF or 25 BBls per day at depths less than 8,000 feet.
  • Wells permitted July 1, 1988 or later.
8%All other taxable production.

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