Okla. Admin. Code § 710:45-9-11

Current through Vol. 42, No. 7, December 16, 2024

Section 710:45-9-11 - Gas lift exclusion

(a) When a volume of natural gas is injected as an external source of pressure to supplement formation gas (not produced from the same lease), and the gross production and petroleum excise taxes have been paid on the injected gas, each MCF injected is not considered gas produced from the well when recovered, and an exclusion from gross production tax may be claimed for gas used, subject to the following provisions:

(1) The injected volume or gas lift for each lease may only be recovered within one year of the date of injection into the same lease.

(2) Monthly injection volume or gas lift exclusions shall not exceed monthly total lease production.

(3) Injection or gas lift value, for exclusion purposes, is the lesser price paid for the injection or gas lift volume or the posted price of the gas produced on the lease where recovered.

(4) Recovery of the injection or gas lift exclusion must begin with the first production after injection. For any gas lift purchased, after date of injection and prior to receipt of Affidavit for OCC Credit and/or OTC Tax Exclusion (OTC Form 317), the taxpayer must file an amended report and request a credit memo or tax refund. After receipt of OTC Form 317, the taxpayer may show injection or gas lift exclusion on his monthly tax report.

(5) The producer shall complete the operator's portion of OTC Form 317 and provide the purchaser a copy of the form along with supporting invoices.

(6) The purchaser shall complete his portion of OTC Form 317.

(7) A notarized legible copy of OTC Form 317 must accompany each report for refund or credit memo and each monthly report that reflects a claim for gas lift exclusion.

(8) All injection or gas lift exclusions claimed on future reports which do not comply with the provisions of this Section will be disallowed.

(b)"Lease", as used in this Section, means the Oklahoma Tax Commission production unit number assigned to the unit.

Okla. Admin. Code § 710:45-9-11

Adopted by Oklahoma Register, Volume 41, Issue 22, August 1, 2024, eff. 11/1/2024