Frequently Asked Questions
Oilfield Site Restoration Fee
Who is responsible for paying the Oilfield Site Restoration Fee?
LA R.S. 30:87 imposes the oilfield site restoration fee on each barrel of oil and condensate produced from producing wells in this state. The fee must be paid by the operator of record. Louisiana Administrative Code 61:I.5301.E.3 provides that “Every operator of record of producing oil and/or gas wells must submit a return and make payments of the fees imposed by LA R.S. 30:87. Purchasers of oil and/or gas may make payment on behalf of the operator of record and their respective working-interest owners." Purchasers who pay the fee on behalf of working-interest owners, should provide them with notice of the date and amount of payment.
How much is the Oilfield Site Restoration Fee?
For gas wells, the fee is three-tenths of one cent per 1,000 cubic feet of natural gas and is assessed on gross production PRIOR to any reductions for exclusion codes.
For oil wells, the fee is assessed on gross production and is payable upon the initial disposition. The amount of the fee is based on the oil price on July 1st of each year for the ensuing 12 months based upon the average New York Mercantile Exchange (NYMEX) Price per barrel of crude oil per month on the close of business on June thirtieth for the prior 12 months as follows:
(i) The fee shall be one and one-half cents per barrel if the price of oil is at or below $60 per barrel.
(ii) The fee shall be three cents per barrel if the price of oil is above $60 and at or below $90 per barrel.
(iii) The fee shall be four and one-half cents per barrel if the price of oil is above $90 per barrel.
Effective July 1, 2017, the oilfield site restoration fee is assessed on all production from oil and gas wells. This includes all wells certified by the Louisiana Office of Conservation as exempt from severance taxes (LDR rate codes D, H, T and OR), as well as inactive reduced or orphan reduced ( LDR rate codes IA and OW) and reduced rate production wells.
The full amount of the fee is paid on all production except for production from reduced rate oil and gas production wells, such as stripper wells and incapable wells. The fee for these wells is in the same proportion to the oil or gas full rate production fees as the reduced rate severance tax is to the full rate severance tax.
How do I file Oilfield Site Restoration Fee returns?
The oilfield site restoration fee returns may be submitted on paper by mail or filed electronically using the LaTAP link on our website.
How do I amend Oilfield Site Restoration Fee returns?
There is no “amended” return for the Oilfield Site Restoration Fee. The taxpayer must complete a new, corrected return with the accurate information and file it with LDR. This will replace the original return. The corrected return can be submitted electronically or on paper regardless of the filing method used for the original return.
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