I have noticed that the tax rate that Louisiana applies to well production varies a lot, like 10 times more for some wells vs others nearby. Does this have to do with when the wells were completed?
William, there are a number of ways that the state severance tax on natural gas changes periodically. The rate is adjusted annually mid year by formula set by the legislature. I'll put a link below.
A well completed in the fist half of a year will have a different rate than one completed in the second half even if those completion dates are only weeks apart. Then there are the different classifications for gas wells based on their production volume - capable, incapable and stripper. Different rates apply to each class. I seldom look at severance tax questions because they are very rare here on GHS.com.
Skip Peel - Mineral Consultant
William, there are a number of ways that the state severance tax on natural gas changes periodically. The rate is adjusted annually mid year by formula set by the legislature. I'll put a link below.
A well completed in the fist half of a year will have a different rate than one completed in the second half even if those completion dates are only weeks apart. Then there are the different classifications for gas wells based on their production volume - capable, incapable and stripper. Different rates apply to each class. I seldom look at severance tax questions because they are very rare here on GHS.com.
https://dam.ldr.la.gov/lawspolicies/RIB%2025-015%20Natural%20Gas%20...
Jan 2