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Tax Exemption for Qualifying Low Producing Gas Wells

The Texas Legislature has provided a natural gas severance tax exemption for low producing gas wells. The exemption took effect Sept. 1, 2005.

To qualify for tax exemption, production on an eligible gas well as reported to the Texas Railroad Commission during the prior three months cannot exceed 90 Mcf per day. The amount of exemption is based upon the Comptroller-certified average gas price for that report month. The average gas price is based upon daily index prices for the three months immediately prior to the report month.

Qualifying Wells

Taxpayers can file form AP-217 (PDF, 74k) for any gas wells that meet the production requirements given above. The production per day will be determined by using the monthly well production report filed with the Texas Railroad Commission. The exemption does not apply to casinghead gas or condensate.

Filing Instructions and Examples for Qualifying Low-Producing Wells

Price Conditions

Gas from qualified wells becomes eligible for different levels of exemption from natural gas severance tax based upon the Comptroller-certified average price for the reporting month.

Average Taxable Gas Price Exemption
More Than $3.50 No Exemption
Over $3 to $3.50 25 Percent Credit
Over $2.50 to $3 50 Percent Credit
$2.50 or Less 100 Percent Credit

The Comptroller-certified average price of gas to be used in these calculations will be posted in the Texas Register and on this Web site. When the average price falls within one of the categories listed above, gas will be allowed the corresponding level of exemption for that reporting month.

Low Producing Well Exemption


2014

Report Period Price of Gas Eligibility
November 2014 $3.02/Mcf Eligible for 25 Percent Credit
October 2014 $3.08/Mcf Eligible for 25 Percent Credit
September 2014 $3.25/Mcf Eligible for 25 Percent Credit
August 2014 $3.41/Mcf Eligible for 25 Percent Credit
July 2014 $3.57/Mcf Not Eligible for Exemption
June 2014 $3.56/Mcf Not Eligible for Exemption
May 2014 $3.74/Mcf Not Eligible for Exemption
April 2014 $3.74/Mcf Not Eligible for Exemption
March 2014 $3.70/Mcf Not Eligible for Exemption
February 2014 $3.30/Mcf Eligible for 25 Percent Credit
January 2014 $3.07/Mcf Eligible for 25 Percent Credit

2013

Report Period Price of Gas Eligibility
December 2013 $2.89/Mcf Eligible for 50 Percent Credit
November 2013 $2.82/Mcf Eligible for 50 Percent Credit
October 2013 $2.82/Mcf Eligible for 50 Percent Credit
September 2013 $2.87/Mcf Eligible for 50 Percent Credit
August 2013 $3.05/Mcf Eligible for 25 Percent Credit
July 2013 $3.20/Mcf Eligible for 25 Percent Credit
June 2013 $3.19/Mcf Eligible for 25 Percent Credit
May 2013 $2.99/Mcf Eligible for 50 Percent Credit
April 2013 $2.78/Mcf Eligible for 50 Percent Credit
March 2013 $2.71/Mcf Eligible for 50 Percent Credit
February 2013 $2.82/Mcf Eligible for 50 Percent Credit
January 2013 $2.85/Mcf Eligible for 50 Percent Credit

2012

Report Period Price of Gas Eligibility
December 2012 $2.71/Mcf Eligible for 50 Percent Credit
November 2012 $2.47/Mcf Eligible for 100 Percent Credit
October 2012 $2.33/Mcf Eligible for 100 Percent Credit
September 2012 $2.23/Mcf Eligible for 100 Percent Credit
August 2012 $2.14/Mcf Eligible for 100 Percent Credit
July 2012 $1.89/Mcf Eligible for 100 Percent Credit
June 2012 $1.84/Mcf Eligible for 100 Percent Credit
May 2012 $1.86/Mcf Eligible for 100 Percent Credit
April 2012 $2.05/Mcf Eligible for 100 Percent Credit
March 2012 $2.32/Mcf Eligible for 100 Percent Credit
February 2012 $2.60/Mcf Eligible for 50 Percent Credit
January 2012 $2.85/Mcf Eligible for 50 Percent Credit

2011

Report Period Price of Gas Eligibility
December 2011 $2.93/Mcf Eligible for 50 Percent Credit
November 2011 $2.97/Mcf Eligible for 50 Percent Credit
October 2011 $3.08/Mcf Eligible for 25 Percent Credit
September 2011 $3.26/Mcf Eligible for 25 Percent Credit
August 2011 $3.35/Mcf Eligible for 25 Percent Credit
July 2011 $3.34/Mcf Eligible for 25 Percent Credit
June 2011 $3.23/Mcf Eligible for 25 Percent Credit
May 2011 $3.18/Mcf Eligible for 25 Percent Credit
April 2011 $3.26/Mcf Eligible for 25 Percent Credit
March 2011 $3.34/Mcf Eligible for 25 Percent Credit
February 2011     $3.35/Mcf Eligible for 25 Percent Credit
January 2011 $3.12/Mcf Eligible for 25 Percent Credit

2010

Report Period Price of Gas Eligibility
December 2010 $3.02/Mcf Eligible for 25 Percent Credit
November 2010 $3.07/Mcf Eligible for 25 Percent Credit
October 2010 $3.34/Mcf Eligible for 25 Percent Credit
September 2010 $3.57/Mcf Not Eligible for Exemption
August 2010 $3.55/Mcf Not Eligible for Exemption
July 2010 $3.42/Mcf Eligible for 25 Percent Credit
June 2010 $3.29/Mcf Eligible for 25 Percent Credit
May 2010 $3.58/Mcf Not Eligible for Exemption
April 2010 $3.99/Mcf Not Eligible for Exemption
March 2010 $4.27/Mcf Not Eligible for Exemption
February 2010 $4.12/Mcf Not Eligible for Exemption
January 2010 $3.90/Mcf Not Eligible for Exemption

2009

Report Period Price of Gas Eligibility
December 2009 $3.41/Mcf Eligible for 25 Percent Credit
November 2009 $3.06/Mcf Eligible for 25 Percent Credit
October 2009 $2.74/Mcf Eligible for 50 Percent Credit
September 2009 $2.87/Mcf Eligible for 50 Percent Credit
August 2009 $3.04/Mcf Eligible for 25 Percent Credit
July 2009 $3.06/Mcf Eligible for 25 Percent Credit
June 2009 $3.09/Mcf Eligible for 25 Percent Credit
May 2009 $3.22/Mcf Eligible for 25 Percent Credit
April 2009 $3.64/Mcf Not Eligible for Exemption
March 2009 $4.14/Mcf Not Eligible for Exemption
February 2009 $4.76/Mcf Not Eligible for Exemption
January 2009 $5.16/Mcf Not Eligible for Exemption

2008

Report Period Price of Gas Eligibility
December 2008 $5.55/Mcf Not Eligible for Exemption
November 2008 $5.91/Mcf Not Eligible for Exemption
October 2008 $7.01/Mcf Not Eligible for Exemption
September 2008 $8.24/Mcf Not Eligible for Exemption
August 2008 $9.13/Mcf Not Eligible for Exemption
July 2008 $8.95/Mcf Not Eligible for Exemption
June 2008 $8.22/Mcf Not Eligible for Exemption
May 2008 $7.41/Mcf Not Eligible for Exemption
April 2008 $6.90/Mcf Not Eligible for Exemption
March 2008 $6.61/Mcf Not Eligible for Exemption
February 2008 $6.44/Mcf Not Eligible for Exemption
January 2008 $6.25/Mcf Not Eligible for Exemption

2007

Report Period Price of Gas Eligibility
December 2007 $5.87/Mcf Not Eligible for Exemption
November 2007 $5.49/Mcf Not Eligible for Exemption
October 2007 $5.37/Mcf Not Eligible for Exemption
September 2007 $5.65/Mcf Not Eligible for Exemption
August 2007 $5.39/Mcf Not Eligible for Exemption
July 2007 $5.82/Mcf Not Eligible for Exemption
June 2007 $6.16/Mcf Not Eligible for Exemption
May 2007 $6.50/Mcf Not Eligible for Exemption
April 2007 $6.42/Mcf Not Eligible for Exemption
March 2007 $6.18/Mcf Not Eligible for Exemption
February 2007 $6.17/Mcf Not Eligible for Exemption
January 2007 $6.29/Mcf Not Eligible for Exemption

2006

Report Period Price of Gas Eligibility
December 2006 $6.25/Mcf Not Eligible for Exemption
November 2006 $5.69/Mcf Not Eligible for Exemption
October 2006 $5.40/Mcf Not Eligible for Exemption
September 2006 $5.63/Mcf Not Eligible for Exemption
August 2006 $5.46/Mcf Not Eligible for Exemption
July 2006 $5.75/Mcf Not Eligible for Exemption
June 2006 $5.91/Mcf Not Eligible for Exemption
May 2006 $6.24/Mcf Not Eligible for Exemption
April 2006 $6.78/Mcf Not Eligible for Exemption
March 2006 $8.62/Mcf Not Eligible for Exemption
February 2006 $9.82/Mcf Not Eligible for Exemption
January 2006 $11.061/Mcf Not Eligible for Exemption

2005

Report Period Price of Gas Eligibility
December 2005 $10.68/Mcf Not Eligible for Exemption
November 2005 $10.03/Mcf Not Eligible for Exemption
October 2005 $8.35/Mcf Not Eligible for Exemption
September 2005 $6.95/Mcf Not Eligible for Exemption

View HB 2161
Also view Crude Oil Low Producing Well Exemptions

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