Dry Hole Tax Relief Credit

We hear a lot about how expensive it is to drill wells and if it's a dry hole, the company is out a lot of money. But, what we're not told is that there is a dry hole tax relief program in effect in Louisiana, which the Louisiana House of Representatives proposes to extend to June 30, 2011.
See uploaded HB 1026. There are other tax breaks E&P gets, for example, deep wells like the HS horizontal wells, get some tax break. Can't help but wonder how much if any of that is passed along via the "trickle down" economic theory.

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Permalink Reply by Two Dogs, Pirate on June 7, 2010 at 4:27
I went to a down to Baton Rouge a couple of years ago to watch the opening bidding on some state leases. During the DNR meeting they talked about legislation that had just been passed that would give tax credits for deep drilling. They said that the state wanted to encourage new drilling that would test deep uplifts that had never been drilled before. If I remember correctly the tax credit they discussed would go like this, if you drill below 19,999 feet and hit a dry hole, then you would be given a tax credit toward a second well drilled to below that depth. I think that was the depth for a North Louisiana well and that South Louisiana would be a bit deeper for the tax credit.

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