Header:
ALASKA ADMINISTRATIVE CODE
TITLE 15. REVENUE
CHAPTER 55. OIL AND GAS PROPERTIES PRODUCTION TAX
ARTICLE 2. PRODUCTION TAX VALUE OF OIL AND GAS
Date:
08/31/2009
Document:
15 AAC 55.250. Standards for lease expenditures other than overhead
(a) Costs incurred before July 1, 2007, other than an allowance for overhead expenses under 15 AAC 55.270, are ordinary and necessary costs upstream of the point of production of oil and gas and direct costs of exploring for, developing, or producing oil or gas deposits, under AS 43.55.165(a), as that provision read on June 30, 2007, only if they are
(1) direct charges under 15 AAC 55.260 incurred for an activity or purpose described in (c) of this section; and
(2) not excluded under AS 43.55.165(e), as that provision read on June 30, 2007, or under AS 43.55.165(e)(6) and (19), as amended and enacted by sec. 60, ch. 1, SSSLA 2007, to the extent made retroactive to April 1, 2006, by sec. 74(b), ch. 1, SSSLA 2007.
(b) Costs incurred after June 30, 2007, satisfy the requirements established in AS 43.55.165(a)(1)(B), as enacted by sec. 58, ch. 1, SSSLA 2007, only if they are
(1) direct charges under 15 AAC 55.260 incurred for an activity or purpose described in (c) of this section; and
(2) not excluded under AS 43.55.165(e), as amended by sec. 60, ch. 1, SSSLA 2007.
(c) The activities or purposes referred to in (a) and (b) of this section are
(1) conducting a geological or geophysical survey to explore for oil or gas;
(2) performing a geological, geophysical, geotechnical, or geochemical examination or investigation specific to reservoir to support development of that reservoir;
(3) processing or interpreting data acquired from an activity described in (1) or (2) of this subsection to support oil or gas exploration, development, or production operations;
(4) designing, surveying, preparing, constructing, operating, or maintaining a drill site for an exploration well or a well to produce oil or gas or to support oil or gas production;
(5) transporting, mobilizing, or demobilizing a rig, coil tubing unit, or similar equipment, or associated supplies, to and on a drill site to drill or perform downhole operations described in (6) -- (8) of this subsection on a well described in (4) of this subsection; demobilization does not include transportation out of the state;
(6) designing, drilling, testing, logging, completing, operating, maintaining, repairing, or suspending a well described in (4) of this subsection;
(7) plugging and abandoning an exploration well, but excluding restoration of the drill site;
(8) plugging a well described in (4) of this subsection, or a portion of the well, for the purpose of redrilling;
(9) designing, constructing, acquiring, transporting, installing, operating, repairing, or maintaining a facility or equipment, other than a well, if the facility or equipment is
(A) used in oil or gas production operations and handles produced fluids upstream of the point of production or fluids injected in a reservoir for reservoir pressure maintenance, repressuring, or enhanced recovery purposes; and
(B) not a refinery, crude oil topping plant, or other manufacturing facility; for purposes of this subparagraph, "manufacturing facility" does not include a gas processing plant;
(10) designing, constructing, acquiring, transporting, installing, operating, repairing, or maintaining a communications system for communications between the site of oil or gas exploration, development, or production operations, and the operator's headquarters in the state, and that are necessary for the operations;
(11) designing, constructing, acquiring, transporting, installing, operating, repairing, or maintaining a field automation system solely dedicated to and specific to a unit or a lease or property and necessary for oil or gas production operations of the unit or the lease or property;
(12) preparing and submitting an application, data, or report necessary to obtain or maintain a governmental permit or similar governmental approval for oil or gas exploration, development, or production operations, or for a facility, equipment, or infrastructure described in (16) of this subsection;
(13) performing an archaeological, geophysical, or environmental survey or preparing an environmental impact statement required by law or otherwise required by a government agency, or required by an oil and gas lease, for oil or gas exploration, development, or production operations, or for a facility, equipment, or infrastructure described in (16) of this subsection, or otherwise complying with environmental requirements imposed by law or oil and gas lease for those operations, or for that facility, equipment, or infrastructure;
(14) performing one or more of the following activities with respect to an oil or hazardous substance cleanup contingency plan, fire response plan, or disaster recovery plan required for safe operation or by law or oil and gas lease, for oil or gas exploration, development, or production operations, or for a facility, equipment, or infrastructure described in (16) of this subsection:
(A) preparing and maintaining the plan;
(B) training personnel or performing practice drills, monitoring, or inspection under the plan;
(C) obtaining and maintaining equipment and supplies required under the plan to be routinely kept on hand;
(15) monitoring and maintaining the safety of personnel located at the site, or in the vicinity, of oil or gas exploration, development, or production operations;
(16) designing, constructing, acquiring, transporting, installing, operating, repairing, or maintaining a facility, equipment, or infrastructure that is located in the vicinity of and is used to support oil or gas exploration, development, or production operations; that facility, equipment, or infrastructure
(A) includes
(i) camps;
(ii) operations centers;
(iii) laboratories;
(iv) staging pads, roads, bridges, docks, helipads, landing areas, and similar transportation structures;
(v) medical facilities;
(vi) emergency response facilities;
(vii) storage facilities;
(viii) security facilities;
(ix) repair and maintenance shops; and
(x) vehicles;
(B) does not include refineries, topping plants, or other manufacturing facilities.
(d) A cost incurred jointly for both an activity or purpose described in (c) of this section and an activity or purpose not described in (c) of this section must be allocated between the activity or purpose described in (c) of this section and the other activity or purpose using a reasonable allocation methodology.
(e) Costs incurred before July 1, 2007, that satisfy the requirements of (a)(1) and (2) of this section are not a producer's or explorer's lease expenditures under AS 43.55.165(a), as that provision read on June 30, 2007, unless the costs are costs, incurred by the producer after March 31, 2006, of exploring for, developing, or producing oil or gas deposits located within the producer's leases or properties in the state or, in the case of land in which the producer or explorer does not own a working interest, are costs, incurred by the producer or explorer after March 31, 2006, of exploring for oil or gas deposits located within other land in the state.
(f) Costs incurred after June 30, 2007, that satisfy the requirements of (b)(1) and (2) of this section are not a producer's or explorer's lease expenditures under AS 43.55.165(a), as repealed and reenacted by sec. 58, ch. 1, SSSLA 2007, unless the costs also satisfy the requirements of AS 43.55.165(a)(1)(A), as enacted by sec. 58, ch. 1, SSSLA 2007.
(g) For purposes of this section, "designing" is limited to activities specific to an identifiable well, facility, item of equipment, or system, and does not include activities of more general applicability or that would ordinarily be considered research and development.
|