Alaska Administrative Code › Title 15 - Revenue › Chapter 55 - Oil and Gas Production Tax and Oil Surcharge › Article 2 - Production Tax Value of Oil and Gas › 15 AAC 55.217 - Carried-forward annual losses after December 31, 2017

Current through May 31, 2024
(a) This section
				applies to lease expenditures incurred after December 31, 2017, to explore for,
				develop, or produce oil or gas deposits located outside the Cook Inlet
				sedimentary basin.
(b) For
				carried-forward annual losses for a segment under
				15 AAC 55.206(c)(1) and (3), the
				adjusted lease expenditures that establish each carried-forward annual loss are
				determined using the following procedure, unless no oil or gas is produced
				during the calendar year from the segment:
(1) for any oil or gas produced during the
				calendar year for which the gross value at the point of production is reduced
				under
				AS
				43.55.160(f) or (f) and (g),
				the reduction is added back to the gross value at the point of
				production;
(2) the adjusted lease
				expenditures incurred by the producer during the calendar year that are
				applicable to the segment under
				15 AAC 55.215 are segregated into the following groups:
(A) the adjusted lease expenditures incurred
				to explore for, develop, or produce oil or gas deposits located within segment
				leases or properties from which oil or gas is produced during the calendar
				year, as allocated under
				15 AAC 55.215(d) if applicable;
(B) the adjusted lease expenditures incurred
				to explore for, develop, or produce oil or gas deposits located within segment
				leases or properties, if any, from which no oil or gas is produced during the
				calendar year;
(C) the adjusted
				lease expenditures incurred to explore for oil or gas deposits located within
				land in the area under
				15 AAC 55.215(a)(2) other than the
				producer's leases or properties, as allocated under
				15 AAC 55.215(e) or (g), as
				applicable;
(3) if the
				gross value at the point of production of the taxable oil and gas produced by
				the producer during the calendar year from all leases or properties in the
				segment is
(A) less than or equal to the
				total adjusted lease expenditures described in (2)(A) of this subsection, a
				quotient Q is calculated as Q = SE / [SIGMA](PE), where SE = the amount by
				which the total adjusted lease expenditures described in (2)(A) of this
				subsection exceed the gross value at the point of production of the taxable oil
				and gas produced by the producer during the calendar year from all leases or
				properties subject to (2)(A) of this subsection, and PE = the amount, if
				greater than zero, by which the adjusted lease expenditures incurred by the
				producer during the calendar year to explore for, develop, or produce oil or
				gas deposits located within each of those leases or properties, as allocated to
				the segment under
				15 AAC 55.215(d) if applicable, exceeds the
				gross value at the point of production of taxable oil and gas produced by the
				producer during the calendar year from the lease or property; for each of those
				leases or properties for which PE is calculated, PE is multiplied by the
				quotient Q; the product of that multiplication is referred to as TE, and for
				each lease or property for which TE is calculated, a fraction is calculated as
				F = TE / LE, where LE is the amount of adjusted lease expenditures incurred by
				the producer during the calendar year to explore for, develop, or produce oil
				or gas deposits located within the lease or property, as allocated to the
				segment under
				15 AAC 55.215(d) if applicable;
				carried-forward annual losses for the segment are, subject to
				15 AAC 55.224(f) or (g) if applicable,
				established only by
(i) for each lease or
				property for which F is calculated, a fraction F of the adjusted lease
				expenditures incurred by the producer during the calendar year to explore for,
				develop, or produce oil or gas deposits located within the lease or property,
				as allocated to the segment under
				15 AAC 55.215(d) if applicable; for each
				lease or property this fraction F is applied uniformly to all of those adjusted
				lease expenditures; and
(ii) the
				adjusted lease expenditures, if any, described in (2)(B) and (2)(C) of this
				subsection;
(B) greater
				than the adjusted lease expenditures described in (2)(A) of this subsection and
				less than or equal to the sum of the adjusted lease expenditures described in
				(2)(A) and (2)(B) of this subsection, a fraction G is calculated as G = XE /
				AE, where XE = the amount, if any, by which the adjusted lease expenditures
				described in (2)(B) of this subsection exceed the remainder resulting from
				subtracting the adjusted lease expenditures described in (2)(A) of this
				subsection from the gross value at the point of production of the taxable oil
				and gas produced by the producer during the calendar year from all leases or
				properties in the segment, and AE = the total adjusted lease expenditures
				described in (2)(B) of this subsection; carried-forward annual losses for the
				segment are, subject to
				15 AAC 55.224(f) or (g) if applicable,
				established only by
(i) for each lease or
				property subject to (2)(B) of this subsection, a fraction G of the adjusted
				lease expenditures incurred by the producer during the calendar year to explore
				for, develop, or produce oil or gas deposits located within the lease or
				property; for each lease or property this fraction G is applied uniformly to
				all of those adjusted lease expenditures; and
(ii) the adjusted lease expenditures, if any,
				described in (2)(C) of this subsection;
(C) greater than the sum of the adjusted
				lease expenditures described in (2)(A) of this subsection and (2)(B) of this
				subsection and less than the sum of the adjusted lease expenditures described
				in (2)(A), (2)(B), and (2)(C) of this subsection, a fraction H is calculated as
				H = YE / QE, where YE = the amount, if any, by which the adjusted lease
				expenditures described in (2)(C) of this subsection exceed the remainder
				resulting from subtracting the sum of the adjusted lease expenditures described
				in (2)(A) and (2)(B) of this subsection from the gross value at the point of
				production of the taxable oil and gas produced by the producer during the
				calendar year from all leases or properties in the segment, and QE = the total
				adjusted lease expenditures described in (2)(C) of this subsection;
				carried-forward annual losses for the segment are, subject to
				15 AAC 55.224(f) or (g) if applicable,
				established only by a fraction H of the adjusted lease expenditures described
				in (2)(C) of this subsection; this fraction H is applied uniformly to all of
				those lease expenditures;
(D) equal
				to or greater than the sum of the adjusted lease expenditures described in
				(2)(A), (2)(B), and (2)(C) of this subsection, no carried-forward annual loss
				is established for the segment;
(4) in the case of a segment described in
				15 AAC 55.206(c)(1)(E) or (F),before
				2022, the amount initially calculated for each carried-forward annual loss
				under (3) of this subsection is multiplied by the fraction calculated under
				15 AAC 55.224(f)(7); only the product of
				that multiplication, if greater than zero, establishes the carried-forward
				annual loss;
(5) in the case of a
				segment described in
				15 AAC 55.206(c)(3)(B) or (D), after
				2021, the amount initially calculated for each carried-forward annual loss
				under (3) of this subsection is multiplied by the fraction calculated under
				15 AAC 55.224(g)(7); only the product of
				that multiplication, if greater than zero, establishes the carried-forward
				annual loss.