Utah Administrative Code
Topic - Natural Resources
Title R649 - Oil, Gas and Mining; Oil and Gas
Rule R649-3 - Drilling and Operating Practices
Section R649-3-37 - Enhanced Recovery Project Certification
Universal Citation: UT Admin Code R 649-3-37
Current through Bulletin 2024-18, September 15, 2024
1. In order for incremental production achieved from an enhanced recovery project to qualify for the severance tax rate reduction provided under Subsection 59-5-102(9), the operator on behalf of the producers shall present evidence demonstrating that the recovery technique or techniques utilized qualify for an enhanced recovery determination and the Board must certify the project as an enhanced recovery project.
2. For enhanced recovery projects certified by the board after January 1, 1996:
2.1. As part of the process of certifying
incremental production that qualifies for a reduction in the severance tax rate
under Subsection
59-5-102(9),
the operator shall furnish the division:
2.1.1. An extrapolation (projection) and
tabulation of expected non-enhanced recovery of oil and gas production from the
project.
2.1.2. The projection
shall be for not less than seventy-two (72) months commencing with the first
month following the project certification by the board.
2.1.3. The projection shall be based on
production history of any well within the project area for not less than twelve
months immediately preceding either certification or commencement of the
project; reservoir and production characteristics; and the application of
generally accepted petroleum engineering practices.
2.1.4. The projected production volumes
approved by the division shall serve as the base level production for purposes
of determining the incremental oil and gas production that qualifies for a
reduction in the severance tax rate.
2.2. The operator shall provide a statement
as to any assumptions made in preparing the projection and any other
information concerning the project that the division may reasonably require in
order to evaluate the operator's projection.
2.3. An operator's request for incremental
production certification may be approved administratively by the director or
authorized agent. The director or authorized agent shall review the request
within 30 days after its receipt and advise the operator of the decision. If
the operator disagrees with the director or authorized agent's decision, the
operator may request a hearing before the board at its next regularly scheduled
hearing. The director or authorized agent may also refer the matter to the
board if a decision is in doubt.
2.4. Upon approval of a request for
incremental production certification, the director or authorized agent shall
forward a copy of the certification to the Utah Tax
Commission.
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