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Providing coverage of Alaska and northern Canada's oil and gas industry
March 2018

Vol. 23, No.12 Week of March 25, 2018

State publishes credit payments totaling $75.4 million for 2017

Kristen Nelson

Petroleum News

For the second year the Alaska Department of Revenue has released the names and amounts of those from whom the department purchased transferable oil and gas tax credits in the preceding calendar year.

The release is based on a requirement in House Bill 247, passed in 2016, that added an annual reporting requirement.

In a letter to legislators conveying the information, Commissioner of Revenue Sheldon Fisher said $77 million was appropriated to the tax credit fund for fiscal year 2018, including $57 million from the operating budget and $20 million from the capital budget.

He said that per the departmentís regulations, that amount was used to pay a 16 percent proration of all certificates for which repurchase was requested in calendar year 2016, the bulk being carried forward annual loss credits for calendar year 2015. Fisher said there were a handful of certificates for which payment was not completed due to pending legal issues with the taxpayer, which accounts for the difference between the appropriation and the $75.4 million in purchases the department reported.

As of Jan. 1, the commissioner said, repurchase had been requested for $806,913,934 in tax credit certificates, $398,307,172 for 2016 certificates, $330,140,114 for 2017 certificates and $78,466,648 for conditional 2017 certificates.

As of Jan. 1, there was also $78,320,293 in certificates outstanding, which fall into one of three categories, Fisher said: received by companies but repurchase not requested by Dec. 31, transferred or sold to another taxpayer who intends to use them to offset production liability or held by a taxpayer ineligible for cash reimbursement because that taxpayer produced more than 50,000 taxable barrels of oil per day.

Purchases from 27 in 2017

The departmentís report included payments made in 2016, when credit certificates were purchased from 12 taxpayers. In 2017, credit certificates were purchased from 27 taxpayers.

Repsol E&P USA topped the 2017 list with $17.8 million in certificate purchases by the state, followed by Caelus (multiple subsidiaries) at $16.9 million and Cornucopia Oil & Gas Co. at 16.3 million. Repsol is a partner at the Pikka discovery on the North Slope; Caelus is the operator at Oooguruk but drilled two exploration wells at Smith Bay in 2015; Cornucopia is the primary working interest owner in Furie Operating Alaskaís Kitchen Lights.

BlueCrest Energy, operator at Cosmopolitan on Cook Inlet, was fourth at $6.4 million, followed by Great Bear Petroleum Operating at $5 million, and Mustang Operations Center 1, in which Alaska Industrial Development and Export Authority is a participant, at $3.1 million.

Of those three, BlueCrest is in production, Great Bear is exploring on the North Slope and Mustang is a development not yet in production on the North Slope.

At seventh and eighth in dollar volume, both Caracol Petroleum and TP North Slope Development are involved in the Mustang Development. Caracol sold certificates worth $1.9 million to the state in 2017, TP North Slope certificates worth $1.6 million, bringing Mustang-based state certificates purchases, including the Mustang Operations Center, and a $370,353 purchase from MEP Alaska, to almost $7.1 million.

Other purchases of more than $1 million include from Accumulate Energy Alaska at $1.2 million - the company is exploring on the North Slope; from NordAq Energy at $1.4 million - that company is an original owner and investor in the Smith Bay exploration; and Petro Canada (Alaska) at $1.1 million.

A variety of smaller payments fill out the list.

Ten small working interest owners at the ExxonMobil-operated Point Thomson sold certificates to the state for a combined $341,944.

- KRISTEN NELSON






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