Texas producers laboring under the weight of low commodity
prices are on their way to getting a temporary tax break from the
Texas legislature. Last week, the Texas Senate passed S.B. 290,
which grants a severance tax exemption to marginal gas and oil
wells producing 90 Mcf/d or less or 15 barrels/d or less. Relief
would kick in when gas drops below $1.80/MMBtu and/or oil drops
below $15/barrel for three consecutive months on the New York
If enacted, the legislation would take effect immediately and
would apply until Aug. 1 or until $445 million in tax exemptions
have been granted, whichever comes first.
"We are grateful for some temporary relief during the oil and
gas industry's worst-ever price collapse," said Lindsey Dingmore,
Texas Independent Producers and Royalty Owners vice president for
public affairs. "Small, marginal producers are in real trouble. It
is moving to see the governor and the legislature respond so
quickly." Texas Gov. George W. Bush has said he would sign the
legislation. The proposed legislation has been referred to the
House Ways and Means Committee.
Joe Fisher, Houston
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