Administrative Rules of Montana
Department 42 - REVENUE
Chapter 42.25 - NATURAL RESOURCES TAXES
Subchapter 42.25.18 - Oil and Gas
Rule 42.25.1817 - GROSS VALUE OF NATURAL GAS

(1) If natural gas is sold pursuant to an arm's-length contract at the wellhead, the contract price multiplied by the volume of natural gas will be accepted as the total gross value.

(2) If natural gas is sold in the absence of a contract the total gross value of the natural gas may be determined by reviewing comparable arm's-length contracts. The department will identify comparable arm's-length contracts utilizing factors including but not limited to; similar time, proximity to the location, similar duration, similar gas quality, and similar quantity of gas sold. Upon conducting a comparable arm's-length study, the department will attempt to identify comparable arms-length's contracts within the same field of the leases in question prior to using comparable arm's-length contracts from other fields.

(3) If natural gas is sold through a non-arm's-length contract at the well or wells and sold with an arm's-length contract further downstream of the well or wells, the total gross value of the natural gas may be determined at the delivery point with delivery price adjustments.