Natural Gas Exemption  August 03, 2026  Revenue Information Bulletin 26-014

Because the FY 27 average natural gas price is at or below $4.50 per million BTU, the

severance tax exemption for horizontal gas wells is 100%.

For gas wells completed before July 1, 2025, the exemption is limited to 24 months or until payout of the well is achieved, whichever occurs first.

A Revenue Information Bulletin (RIB) is issued under the authority of LAC 61:III.101.D. A RIB is an informal statement of information issued for the public and employees that is general in nature. A RIB does not have the force and effect of law and is not binding on the public or the Department.

For gas wells completed on or after July 1, 2025, the exemption is limited to 18 months or until payout of the well is achieved, whichever occurs first.

Payment Pending Department of Conservation and Energy Approval
Pursuant to Revenue Information Bulletin 12-018, taxpayers who elect not to pay severance
tax on production from a horizontal well while awaiting final approval from the Louisiana
Department of Conservation and Energy on the Application for Well State Determination are
still required to pay the tax due on the non-exempt production.

For example:
• Horizontal oil well: Because the FY 27 exemption is 80%, a taxpayer awaiting final
approval must pay severance tax on the 20% of production that is not exempt.
• Horizontal gas well: Because the FY 27 exemption is 100%, a taxpayer awaiting final
approval does not owe severance tax on the production, assuming all other
requirements for the exemption are satisfied.

Questions concerning these severance tax values and rates should be directed to
Severance.Inquiries@LA.gov.
Jarrod J. Coniglio
Secretary