Governor signs bill extending exploration incentive credit

Petroleum News Alaska Staff

Gov. Tony Knowles signed House Bill 307 July 5. The bill extends the date that an applicant must complete certain oil and gas exploration work to qualify for an exploration incentive credit from July 2004 to 2007.

The exploration incentive credits program, passed in 1994 for a 10-year period, allows the commissioner of the Department of Natural Resources to grant a credit against royalties, taxes, lease bonuses or rentals, Division of Oil and Gas Director Mark Myers told the Legislature during hearings on the bill in February. Myers said the credit can be as much as 50 percent of the cost of geophysical information, stratigraphic test wells or exploration wells on non-leased state lands, and up to 25 percent of the cost of the same programs on Native or federal land.

Rep. Hugh Fate, R-Fairbanks, sponsor of the bill, said Andex Resources was interested in the credit for work it plans in the Nenana basin, at least some of which would occur after the program ends in 2004.