Section 15 AAC 55.214 - Duration of gross value reductions(a) This section implements the time limits established by AS 43.55.160(f) and (g) for reductions under those provisions in the gross value at the point of production of oil and gas.(b) This subsection applies to (1) oil and gas that meet the criteria for a gross value reduction under AS 43.55.160(f)(1) or under AS 43.55.160(f)(1) and (g) if any oil or gas was produced before January 1, 2017, from the qualifying lease or property; (2) oil and gas that meet the criteria for a gross value reduction under AS 43.55.160(f)(2) if any oil or gas was produced before January 1, 2017, from the qualifying participating area; and (3) oil and gas that meet the criteria for a gross value reduction under AS 43.55.160(f)(3) if any oil or gas was produced before January 1, 2017, from the qualifying acreage added to a participating area. The period for which oil and gas produced from the qualifying lease or property, qualifying participating area, or qualifying acreage added to a participating area, respectively, may receive a gross value reduction ends on the earlier of December 31, 2022, or the alternate expiration date determined under (g) of this section.(c) This subsection applies to oil and gas that meet the criteria for a gross value reduction under AS 43.55.160(f)(1) or under AS 43.55.160(f)(1) and (g) if no oil or gas was produced before January 1, 2017, from the qualifying lease or property. The period for which oil and gas produced from the qualifying lease or property may receive a gross value reduction begins on the first day that regular production of oil or gas commences from a well producing from the lease or property and ends on the date provided under (t) of this section.(d) This subsection applies to oil and gas that meet the criteria for a gross value reduction under AS 43.55.160(f)(2) if no oil or gas was produced before January 1, 2017, from the qualifying participating area. The period for which oil and gas produced from the qualifying participating area may receive a gross value reduction begins on the first day that regular production of oil or gas commences from a well producing from the participating area and ends on the date provided under (t) of this section. However, if before establishment of the qualifying participating area, regular production of oil or gas commenced from one or more wells producing from a tract or tracts to be included in the participating area, (1) the period begins on the date the participating area is established, unless none of those wells is still producing on that date, and ends on the date provided under (f) of this section;(2) if none of those wells is still producing on the date the participating area is established, the period begins on the earlier of the day any of the wells resumes production after the participating area is established, or the first day on or after the participating area is established that regular production of oil or gas commences from a well producing from the participating area, and ends on the date provided under (f) of this section.(e)This subsection applies to oil and gas that meet the criteria for a gross value reduction under AS 43.55.160(f)(3) if no oil or gas was produced before January 1, 2017, from the qualifying acreage added to a participating area. The period for which oil and gas produced from qualifying acreage added to a participating area may receive a gross value reduction begins on the first day that oil or gas whose volume the producer determines under 15 AAC 55.212(k) qualifies for a gross value reduction is produced from a well all of whose producing intervals are within that acreage, if the well has commenced regular production of oil or gas, and ends on the date provided under (f) of this section.(f)A period subject to (c) - (e) of this section ends on the earlier of the following dates: (1)the last day of the month that (A)immediately precedes the month that includes the seventh anniversary of the day the period began, if that anniversary occurs before the 16th day of the month;(B)includes the seventh anniversary of the day the period began, if that anniversary occurs after the 15th day of the month; or(2)the alternate expiration date determined under (g) of this section.(g)An alternate expiration date for a period under (b) - ( e) of this section for which oil and gas may receive a gross value reduction is determined by (1) identifying the first sequence, if any, of 12 consecutive months over which the average price per barrel of ANS for sale on the United States West Coast exceeds $70, that begins on or after January 1, 2017, for a period under (b) of this section, or that begins on or after the first day of the period, for a period under ( c) - ( e) of this section; (2) identifying the next sequence, if any, of 12 consecutive months over which the average price per barrel of ANS for sale on the United States West Coast exceeds $70, that begins after the first sequence ends; and (3) identifying the next sequence, if any, of 12 consecutive months over which the average price per barrel of ANS for sale on the United States West Coast exceeds $70, that begins after the second sequence ends. The alternate expiration date is the last day of the third sequence. For purposes of this subsection, the average price per barrel of ANS for sale on the United States West Coast over 12 consecutive months is equal to the simple average of the average spot prices for ANS at the United States West Coast during the 12 months as calculated under 15 AAC 55.171(m).(h)If a period for which a gross value reduction is allowed under this section has begun for oil and gas produced from certain land that is later combined with other land and the combined land is treated as a lease or property qualifying for a gross value reduction under AS 43.55.160(f)(1), as a participating area qualifying for a gross value reduction under AS 43 .55.160(f)(2), or as acreage added to an existing participating area and qualifying for a gross value reduction under AS 43.55.160(f)(3), neither the expiration of the period for oil and gas produced from the former land, nor the expiration of the period, if any, for oil and gas produced from the latter land, is extended beyond what it would be if the combination had not occurred.(i)The day that a period for which a gross value reduction is allowed under this section ends is included in the period.(j)The date that regular production of oil or gas commences from a well is determined by the Alaska Oil and Gas Conservation Commission.(k)In this section, "gross value reduction" means a reduction in the gross value at the point of production of oil or gas under AS 43.55.160(f) or AS 43.55.160(f) and (g).Eff. 3/1/2017, Register 221, April 2017Authority:AS 43.05.080
AS 43.55.011
AS 43.55.024
AS 43.55.110
AS 43.55.160
AS 43.55.165