Gross Production Incentive Rebates

Each of the following incentive exemptions, "Reestablished Production", "Production Enhancement", "Deep Well" (spud before July 1, 2005), "New Discovery", and "3-D Seismic" are contingent upon the average price of oil and/or gas for each calendar year period as provided for under 68 O.S. Sec. 1001 (K).  The statute places a ceiling price of gas at $5.00 per mcf and oil at $30.00 per BBL.  In the event the average calendar year price of Oklahoma oil and/or gas exceeds the established ceiling price, the exemption rebates applicable to the current fiscal year period would be void.

Since the inception of the tax rebates in 1994, the following fiscal year periods were capped.

• Fiscal year 1997 (July 1996 through June 1997) was capped for oil.
• Fiscal year 2002 (July 2001 through June 2002) was capped for gas.
• The incentive price cap for calendar year 2005 was exceeded for both oil and gas. No claims for refund will be paid for the production period of July 05 through June 06 with the exception of approved Horizontally Drilled Wells and Approved Deep Wells which were spud after July 1, 2005 and drilled to a depth of fifteen thousand feet or greater.

  As provided for under enrolled House Bill 1588, claims for refund for qualifying Deep Wells must be filed with the Tax Commission no later than January 2 nd, 2007, for the production period of July 2005 through June 2006.

Notice:
The claim period for qualified deep wells has been extended for the production period of July 1, 2005 through June 30, 2006. The total amount of claims originally filed did not exceed the Seventeen million dollar ($17,000,000) threshold limit. Therefore, any outstanding claims may be filed with the Tax Commission through April 1, 2007. In the event the total amount claimed during the extended period should exceed the threshold limit, such claims shall be paid on a proportionate share basis.