Title 15 . Revenue

Chapter 55 . (Repealed)

Section 21. Well days and calculation of economic limit factor for oil or gas

15 AAC 55.021. Well days and calculation of economic limit factor for oil or gas

(a) A producer that is also the operator of a lease or property shall, as part of the return filed under AS 43.55.030 , submit a detailed account of the individual well data showing the number of days and fractions of days that a well operated for the month for which the tax is being paid. A producer that is not the operator shall, as part of the return filed under AS 43.55.030 , either submit that account or acknowledge in the designated section of the return that the producer is relying on the well days that the operator of the lease or property reported.

(b) The number of well days during a month for a well is the number of hours that the well is operating during the month, divided by 24. The producer shall calculate both hours and well days to the first decimal place using the automatic convention in the rounding command or function in commercially available software.

(c) A well is operating for purposes of this section when the well is yielding oil or gas that is considered to be produced under AS 43.55 and this chapter. An injection well, or a well yielding only gas that is not considered to be produced under 15 AAC 55.071 and 15 AAC 55.151(e) , is not operating within the meaning of this section.

(d) For purposes of calculating the economic limit factor for oil, a producer shall include the production of all oil, as "oil" is defined under AS 43.55.900 . For purposes of calculating the economic limit factor for gas, a producer shall include the production of all gas, as "gas" is defined under AS 43.55.900 .

(e) If both oil and gas are produced from a lease or property in the month for which the tax is to be paid, the producer shall allocate the total well days for the lease or property between the oil and gas based on the relative volumes of oil and gas produced from the lease or property for the month. For purposes of that allocation, one barrel of oil is equivalent to 10 Mcf of gas. For a month in which both oil and gas are produced from a lease or property, a producer that is also the operator of the lease or property shall provide, as part of the return filed under AS 43.55.030 , supporting information on its calculation of the relative volumes of oil and gas for purposes of allocation under this subsection. A producer that is not the operator shall, as part of the return filed under AS 43.55.030 , either submit the supporting information described in this subsection or acknowledge in the designated section of the return that the producer is relying on the supporting information that the operator of the lease or property reported.

(f) A hole drilled or bored in the ground to produce oil or gas, or both, is a single well, regardless of how many completions or lateral extensions that hole contains; how many pools, formations, or zones are produced through that hole; or whether that hole produces both oil and gas. A producer may not count a given hour of a single well's operation more than once in calculating one or more economic limit factors, regardless of how many of the well's completions or lateral extensions may have produced during that hour; how many pools, formations, or zones may have been produced through the well during that hour; or whether the well produced both oil and gas during that hour.

(g) If a single well produces oil or gas during a month from two or more separate leases or properties that have not been aggregated under AS 43.55.013 (j), the producer shall allocate the hours of operation of that well between the separate leases or properties when calculating the respective well days for the separate leases or properties for the month for which the tax is to be paid. If the well produces only oil during the month, the producer shall allocate the hours of operation during the month based on the relative volumes of oil that the well produced from the separate leases or properties during the month. If the well produces only gas during the month, the producer shall allocate the hours of operation during the month based on the relative volumes of gas that the well produced from the separate leases or properties during the month. If the well produces both oil and gas during the month, the producer shall allocate the hours of operation during the month based on the relative volumes of oil and gas that the well produced from the separate leases or properties during the month. For purposes of that allocation, one barrel of oil is equivalent to 10 Mcf of gas. For a month in which both oil and gas are produced from a lease or property, the producer that is also the operator of the lease or property shall provide, as part of its return under AS 43.55.030 , supporting information on its calculation of the relative volumes of oil and gas for purposes of allocation under this subsection. A producer that is not the operator shall, as part of the return filed under AS 43.55.030 , either submit the supporting information described in this subsection or acknowledge in the designated section of the return that the producer is relying on the supporting information that the operator of the lease or property reported.

(h) For purposes of this section, "gas produced" or "gas production" includes only gas considered to be produced under 15 AAC 55.071 and 15 AAC 55.151(e) .

(i) Repealed 1/1/2000.

History: Eff. 1/1/95, Register 132; am 1/1/2000, Register 152; am 1/1/2002, Register 160

Authority: AS 43.05.080

AS 43.55.013

AS 43.55.020

AS 43.55.030

AS 43.55.040

AS 43.55.110

AS 43.55.900