Clock Starts Ticking On $5.3B Tax Break For North Dakota Oil
by Reuters|Ernest Scheyder|
WILLISTON, N.D., Feb 5 (Reuters) - Tumbling crude oil prices have started the clock ticking on a potential $5.3 billion, two-year tax break for North Dakota's oil producers.
The countdown, which started this week, holds the promise of a silver lining of sorts for oil producers and their contractors in the No. 2 oil-producing U.S. state, many of whom have struggled with a roughly 50 percent drop in oil prices since last June.
North Dakota officials designed the tax waiver in 1987 to encourage drilling. Here's how it works: North Dakota waives its 6.5 percent oil extraction tax if the monthly price of benchmark West Texas Intermediate (WTI) crude at the Cushing, Oklahoma, transport hub falls below $52.59 per barrel for five consecutive months.
For January 2015, the average price was $47.98 per barrel. "Since January prices were well below the required price for the large trigger, we are now in our first month," said Ryan Rauschenberger, North Dakota's tax commissioner.
- See more at: http://www.rigzone.com/news/article.asp?hpf=1&a_id=137094#sthash.3vQoSuuC.dpuf
Thu Feb 05, 2015 1:36 pm