Texas producers laboring under the weight of low commodityprices are on their way to getting a temporary tax break from theTexas legislature. Last week, the Texas Senate passed S.B. 290,which grants a severance tax exemption to marginal gas and oilwells producing 90 Mcf/d or less or 15 barrels/d or less. Reliefwould kick in when gas drops below $1.80/MMBtu and/or oil dropsbelow $15/barrel for three consecutive months on the New YorkMercantile Exchange.
If enacted, the legislation would take effect immediately andwould apply until Aug. 1 or until $445 million in tax exemptionshave been granted, whichever comes first.
“We are grateful for some temporary relief during the oil andgas industry’s worst-ever price collapse,” said Lindsey Dingmore,Texas Independent Producers and Royalty Owners vice president forpublic affairs. “Small, marginal producers are in real trouble. Itis moving to see the governor and the legislature respond soquickly.” Texas Gov. George W. Bush has said he would sign thelegislation. The proposed legislation has been referred to theHouse Ways and Means Committee.
Joe Fisher, Houston
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