Severance tax change cuts North Slope asset values

05/16/2005
In his 2005 state-of-the-state address in January, Alaska Gov. Frank H. Murkowski announced with little warning some unexpected news. As of February 2005, the state includes Prudhoe Bay’s satellites in its severance tax calculation. Wood Mackenzie estimates that this aggregation generates an additional net tax liability of $88 million in 2005 for Prudhoe Bay’s owners. As a result of the change, the present value of the assets at a 10% discount rate (PV10) drops by $528 million. The impact would be even more severe if severance taxes were not deductible against state and federal income taxes.Aurora, Borealis, Midnight Sun, Orion, Polaris, and Point McIntyre oil fields are now i...
read-story

Why Register?

Non-subscribers can only view whitepapers by providing name, home and email address, phone number and other information and comment on/rate articles.

Why Subscribe?

Oil & Gas Journal subscribers with login credentials can access these premium features of OGJ Online:

  • Current Issue – an html version of the current week's issue of Oil & Gas Journal.
  • Past Issues – An Electronic OGJ Archive. A keyword-searchable archive of all issues of Oil & Gas Journal dating back to 1990; also searchable by issue date.
  • Market Journal – a weekly round-up of the oil and gas markets, with observations from leading analysts.
  • Editor's Perspective – a short article of insight and opinion by the Editor of Oil & Gas Journal.
  • OGJ Industry Stats – quick access to current industry statistics from Oil & Gas Journal.
  • OGJ Survey Downloads - quick access to exclusive reports from Oil & Gas Journal.

 

Subscriber Help or Subscribe

Oil & Gas Journal Subscribers: Have your subscription number (from the mailing label on the cover of your Oil & Gas Journal) and e-mail address ready to set up your online account through Customer Service Assistant.

If you're not an Oil & Gas Journal subscriber, start a subscription and gain access to the subscriber areas of OGJ Online now.

Stay Connected