Rule 42.25.1808 - DUALLY QUALIFIED STRIPPER WELLS AND ENHANCED RECOVERY PROJECTS(1) For the purpose of this rule a lease or unit will be considered to be dually qualified if the lease or unit qualifies as an oil stripper and the wells are within an approved enhanced recovery project. If the wells are dually qualified, the tax rates for stripper, incremental and non-incremental may all apply. (a) If the production for a quarter from a dually qualified lease or unit is less than 270 barrels (three barrels/day times 90 days in a calendar quarter) for each producing well in the lease or unit the tax rates in ARM 42.25.1809(1) (b) (ii) (C) or (1) (b) (ii) (D) apply.(b) If the production for a quarter from a dually qualified lease or unit is less than 900 barrels (10 barrels/day times 90 days in a calendar quarter) for each producing well in the lease or unit the tax rates in ARM 42.25.1809(1) (b) (ii) (A) apply.(c) If the production from each well in a dually qualified lease or unit is greater than 900 barrels for each producing well in the lease or unit the tax rates in ARM 42.25.1809(1) (b) (ii) (A) apply to the first 10 barrels, and if: (i) The total production for the quarter from the dually qualified lease or unit is less than the "production decline rate" for the calendar quarter any production in excess of 900 barrels times the number of producing wells in the dually qualified lease or unit will be taxed at the rates in ARM 42.25.1809(1) (b) (ii) (B). None of the production would be taxed at the incremental tax rates. Example: A dually qualified lease or unit has 3 producing wells in it and the "production decline rate" for the quarter is 5700 barrels. The actual production for the quarter is 5000 barrels. Therefore, 2700 barrels (3 wells times 900 barrels per well) would be taxed at the rates in ARM 42.25.1809(1) (b) (ii) (A), and 2300 barrels (5000 barrels minus 2700 barrels) would be taxed at the rates in ARM 42.25.1809(1) (b) (ii) (B).(ii) The total production for the calendar quarter from the dually qualified lease or unit that is in excess of the "production decline rate" will be taxed as incremental. The tax rates in ARM 42.25.1809(1) (b) (iv) (A) will apply for secondary production, or the tax rates in ARM 42.25.1809(1) (b) (iv) (B) for tertiary production will apply. Example: A dually qualified lease or unit has 5 producing wells in it and the "production decline rate" for the quarter is 5700 barrels. The actual production for the quarter is 6000 barrels. Therefore, 4500 barrels (5 wells times 900 barrels per well) would be taxed at the rates in ARM 42.25.1809(1) (b) (ii) (A), and 1200 barrels (1200 barrels plus 4500 barrels = 5700) would be taxed at the rates in ARM 42.25.1809(1) (b) (ii) (B), and 300 (6000-5700) barrels would be taxed at the appropriate incremental tax rates in ARM 42.25.1809(1) (b) (iv).
Mont. Admin. r. 42.25.1808
NEW, 1996 MAR p. 2001, Eff. 7/19/96; AMD, 2000 MAR p. 1347, Eff. 5/26/00; AMD, 2005 MAR p. 2470, Eff. 12/9/05.15-36-322, MCA; IMP, 15-36-303, 15-36-304, MCA;