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In Reply to: RE: Reply to Inmate51's solar power post from way down below posted by Chris from Lafayette on July 31, 2020 at 14:59:44
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Follow Ups:
We need details :)We do and evaluate geophysical work. No govt checks
We acquire leases with massive bonuses paid to landowners. No govt checks
We hire contractors to drill the wells. No govt checks
We have our staff or contractors evaluate results in real time to make forward going decisions. No govt checks
We complete wells (~30-40% of the total well cost) that appear to be economical and clear our hurdle rate. No govt checks
We expend huge amounts of cash monthly operating the wells. No govt checks.
We pay royalties to landowners and production, sales, and use taxes to the state and ad valorem taxes to local authorities and receive no govt checks.
We recomplete wells into different zones once primary zone is depleted, no govt checks.
We incur myriads of other expenses without receiving govt checks.
We DO receive favorable tax treatment in that we're allowed to expense, rather than depreciate, intangible expenses (think dry hole expense, think labor on a good well, etc.). Overall net tax effect is zero to the treasury over time but we do have the benefit of the time value of money. All extractive industries are treated similarly.
We are offered local property tax incentives by localities to move or expand there. Think the deals offered to Amazon for instance. Same type deals are offered oil and gas cos.
There are reductions in production taxes and royalties that are statutorily available in some states if wells meet certain criteria.
There is some solid reasoning to support these reductions. They are not giveaways. Road Warrior and Co. help the companies realize these benefits as very few companies have staff devoted to them. We thank them in our prayers nightly for under-staffing.
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"E Burres Stigano?"
Edits: 08/02/20 08/02/20 08/02/20
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