TG World claimed $8.7M in PPT credits

TG World Energy Corp. claimed $8.7 million in State of Alaska exploration tax credits in 2007, according to recent company filings.

The Calgary-based independent claimed $3.6 million through the first six months of the year, selling the credits back to the state at full value in October 2007. The company claimed $800,000 in the third quarter of last year and $4.3 million during the last quarter of the year, corresponding to the start of the winter exploration season in Alaska.

The credits reward companies by deducting certain expenses from production taxes.

For companies without production in the state, like TG World, the credits can be reimbursed from the state up to a certain amount or sold on the open market, usually at a reduced rate.

Earlier in the year, Pioneer Natural Resources earned nearly $75 million from production tax credits by using both of those options, reimbursing some credits to the state and selling the remaining credits to unnamed companies.

TG World is one of four companies in a joint venture exploring two oil prospects on Alaska’s North Slope. Operated by the Brooks Range Petroleum Corp., the joint venture drilled two wells and a pair of sidetracks this past winter, finding oil at both prospects. The joint venture is currently analyzing well data and 130 square miles of 3-D seismic from the Gwydyr Bay area. The companies are also negotiating a drill rig for next winter in preparation for an expected multi-well program in Alaska.

The joint venture expires in March 2010, but can be continued after that deadline.

TG World spent nearly $8.9 million in Alaska over the first quarter of 2008, mostly on drilling wells and acquiring seismic. The company has not yet claimed production tax credits from those expenses.

— Eric Lidji