11 AAC 83.805. Credit for exploratory wells

Credits may be earned only for one well per sale tract as that tract is defined on the day of a competitive oil and gas lease sale. Actual footage drilled in exploratory wells may earn exploration incentive credits at a rate established by the commissioner. In place of credit for actual footage drilled, expenditures for other operations related to the well will be considered for credit in the following manner:

(1) The cost of constructing and preparing the drilling location will be credited on a case-by-case basis at the discretion of the commissioner, who will determine the specific costs applicable to the exploratory well.

(2) Credits for other costs incurred by the lessee when drilling the exploratory well will also be considered on a case-by-case basis.

(3) At the request of the commissioner, the lessee shall submit all cost information necessary to determine the accuracy of the requested credits. If more than one company participates in drilling the exploratory well, then credit will be allowed in proportion to the participation in the drilling cost of the well.

History: Eff. 11/9/79, Register 72; am 3/30/84, Register 89

Authority: AS 38.05.020

AS 38.05.180

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