35 Miss. Code R. § 4-10-02-100
Certain words, terms and phrases used in this regulation have meanings ascribed to them as follows:
1. Interest Well. When the driller owns a portion of the lease and one or more other persons own the remaining portion upon which a well is drilled, such a joint leasehold is known as an "interest well".
2. Ownership Well. When a drilling contractor owns 100% of a lease and drills a well on it, he has no taxable income.
3. Operator. One who holds all or a fraction of the working or operating rights in an oil or gas lease, and is obligated for the costs of production either as a fee owner or under a lease or any other form of contract creating working or operating rights.
4. Bottom-Hole Contribution. Money or property given to an operator for his use in the drilling of a well on property in which the payor has no interest. The contribution is payable whether the well is productive or nonproductive.
5. Dry-Hole Contribution. Money or property given to an operator for his use in the drilling of a well on property in which the payor has no interest. Such contribution is payable only in the event the well is found to be nonproductive.
6. Total Contract Price or Compensation Received. Amounts received as compensation for performing a drilling contract, including assignments of dry-hole or bottom-hole contributions and anything else of value. When the kind and amount of compensation received by the contractor is contingent upon production, the compensation received shall be the total compensation receivable in the event the well is a dry-hole.
7.
a. Taxable Compensation. In determining "taxable compensation", certain items are deductible from the "compensation received" when the regular retail tax or, if applicable, the contractor's tax (road construction, site preparation, etc.) has been paid by the contractor to the person making the sale or rendering the service and as enumerated below:
i. Additives
ii. Casing
iii. Cement
iv. Coring
v. Directional Drilling
vi. Fishing tool rentals
vii. Logging
viii. Mud
ix. Perforation
x. Road Construction
xi. Site preparation
xii. Testing
xiii. Water
b. No other expenses or cost incurred by the driller in the drilling operation is excludable in determining "taxable compensation".
35 Miss. Code. R. § 4-10-02-100