{"data":{"id":"us-ok/okla.-stat.-tit.-68-68-1001.3a","jurisdiction":"us-ok","citation":"Okla. Stat. tit. 68, § 68-1001.3a","heading":"Economically at-risk oil or gas lease - Tax","body":"exemptions.\n\nA. As used in this section:\n\n1. Prior to January 1, 2015, \"economically at-risk oil or gas\n\nlease\" means any oil or gas lease operated at a net loss or at a net\n\nprofit which is less than the total gross production tax remitted\n\nfor such lease during the previous calendar year;\n\n2. On or after January 1, 2015, and before January 1, 2022,\n\n\"economically at-risk oil or gas lease\" means any oil or gas lease\n\nwith one or more producing wells with an average production volume\n\nper well of ten (10) barrels of oil or sixty (60) MCF of natural gas\n\nper day or less operated at a net loss or at a net profit which is\n\nless than the total gross production tax remitted for such lease\n\nduring the previous calendar year;\n\n3. For calendar year 2022 and subsequent calendar years,\n\n\"economically at-risk oil or gas lease\" means any oil or gas lease\n\nwith one or more producing wells with an average production volume\n\nper well of ten (10) barrels of oil or sixty (60) MCF or less of\n\nnatural gas per day operated at a net loss or at a net profit which\n\nis less than the total gross production tax remitted for such lease\n\nduring the previous calendar year, and any oil lease operating while\n\nthe gross value of the production of oil is less than Fifty Dollars\n\n($50.00), on an average monthly basis, based on a per-barrel\n\nmeasurement of forty-two (42) U.S. gallons of two hundred thirty-one\n\n(231) cubic inches per gallon, computed at a temperature of sixty\n\n(60) degrees Fahrenheit or gas lease operating while the gross value\n\nof the production of gas is less than Three Dollars and fifty cents\n\n($3.50), on an average monthly basis, based on a measurement of one\n\nmillion (1,000,000) British thermal units (MMBtu); and\n\n4. \"Lease\" shall be defined as in Section 1001.2 of this title.\n\nB. When certified as such pursuant to the provisions of this\n\nsection, production from an economically at-risk oil or gas lease\n\nshall be eligible for an exemption from the gross production tax\n\nlevied pursuant to subsection B of Section 1001 of this title for\n\nproduction on such lease during the previous calendar year in the\n\nfollowing amounts:\n\n1. If the gross production tax rate levied pursuant to\n\nsubsection B of Section 1001 of this title was seven percent (7%),\n\nthen the exemption shall equal six-sevenths (6/7) of the gross\n\nproduction tax levied; and\n\n2. If the gross production tax rate levied pursuant to\n\nsubsection B of Section 1001 of this title was five percent (5%),\n\nthen the exemption shall equal four-fifths (4/5) of the gross\n\nproduction tax levied.\n\nC. For all production exempt from gross production taxes\n\npursuant to this section, a refund of gross production taxes paid\n\nfor production in the previous calendar year in the amounts\n\nspecified in subsection B of this section, subject to the\n\nlimitations and provisions specified in subsections D and J of this\n\nsection, shall be issued to the well operator or a designee. For\n\nproduction in calendar years ending on or before December 31, 2015,\n\nthe refund shall not be claimed until after July 1 of the year\n\nfollowing the year of production. For production in the calendar\n\nyear ending December 31, 2016, the refund shall be claimed before\n\nJuly 1, 2017.\n\nD. For oil and natural gas produced from qualifying leases in\n\ncalendar years 2015 and 2016, the total amount of refunds authorized\n\nin this section for each calendar year shall not exceed Twelve\n\nMillion Five Hundred Thousand Dollars ($12,500,000.00) for all\n\nproducts combined. For oil and natural gas produced from qualifying\n\nleases in calendar year 2022 and subsequent calendar years, the\n\ntotal amount of refunds authorized in this section for each calendar\n\nyear shall not exceed Ten Million Dollars ($10,000,000.00) for all\n\nproducts combined. If the amount of claims exceeds the limits\n\nprovided in this subsection, the Tax Commission shall determine the\noducts combined. For oil and natural gas produced from qualifying\n\nleases in calendar year 2022 and subsequent calendar years, the\n\ntotal amount of refunds authorized in this section for each calendar\n\nyear shall not exceed Ten Million Dollars ($10,000,000.00) for all\n\nproducts combined. If the amount of claims exceeds the limits\n\nprovided in this subsection, the Tax Commission shall determine the\n\npercentage of the refund which establishes the proportionate share\n\nof the refund which may be claimed by any taxpayer so that the\n\nmaximum amount authorized by this subsection is not exceeded.\n\nE. Any operator making application for an economically at-risk\n\noil or gas lease status under the provisions of this section shall\n\nsubmit documentation to the Tax Commission, as determined by the Tax\n\nCommission to be appropriate and necessary.\n\nF. For the purposes of this section, determination of the\n\neconomically at-risk oil or gas lease status shall be made by\n\nsubtracting from the gross revenue of that lease for the previous\n\ncalendar year severance taxes, if any, royalty, operating expenses\n\nof the lease to include expendable workover and recompletion costs\n\nfor the previous calendar year, and including overhead costs up to\n\nthe maximum overhead percentage allowed by the Council of Petroleum\n\nAccountants Societies (COPAS) guidelines. For the purposes of this\n\ncalculation, depreciation, depletion or intangible drilling costs\n\nshall not be included as lease operating expenses.\n\nG. The Tax Commission shall have sole authority to determine if\n\nan oil or gas lease qualifies for certification as an economically\n\nat-risk oil or gas lease. The Tax Commission shall promulgate rules\n\ngoverning the certification process.\n\nH. Except as provided in subsection I of this section, gross\n\nproduction tax exemptions under the provisions of this section shall\n\nbe limited to production from calendar years 2005 through 2013 and\n\n2022 and subsequent calendar years; provided, no claims for refunds\n\nfor calendar years 2013 and before shall be paid on or after\n\nDecember 31, 2015.\n\nI. Gross production tax exemptions claimed under the provisions\n\nof this section shall be limited to production from calendar years\n\n2014, 2015 and 2016; provided, no claims for refunds for the\n\ncalendar years 2014 and 2015 shall be claimed or paid more than\n\neighteen (18) months after the first day of the fiscal year during\n\nwhich the refund is first available. For production in calendar\n\nyear 2016, no claim for refund filed on or after July 1, 2017, shall\n\nbe claimed or paid.\n\nJ. Claims for refunds pursuant to the provisions of this\n\nsection for production periods ending on or before December 31,\n\n2016, shall be paid pursuant to the provisions of this subsection.\n\nThe claims for refunds referenced herein shall be paid in equal\n\npayments over a period of thirty-six (36) months. The first payment\n\nshall be made after July 1, 2018, but prior to August 1, 2018. The\n\nTax Commission shall provide, not later than June 30, 2018, to the\n\noperator or designated interest owner, a schedule of rebates to be\n\npaid out over the thirty-six-month period.\n\nK. Claims for refunds pursuant to the provisions of this\n\nsection for production periods beginning and ending on or after\n\ncalendar year 2022 shall be paid in the form of a one-time payment.","path":["OK Code","Title 68"],"source_url":"https://www.oklegislature.gov/OK_Statutes/CompleteTitles/os68.pdf","current_through":"2026-08-14","vintage":"open-us-law v2026.08, retrieved 2026-09-14","retrieved_at":"2026-09-14T18:32:36Z","sha256":"b2b09a23700a9a6d0657eefad8d76dd1a0455c2627e92fa3541756fbae50a308","source_id":"us-ok","stale":false,"prev":"us-ok/okla.-stat.-tit.-68-68-1001.2","next":"us-ok/okla.-stat.-tit.-68-68-1001.4"},"notice":"GroundRules: Original legal text. Not legal advice."}