Reporting Instructions Form For Oil And Gas Taxes - North Dakota Office Of State Tax Commissioner Page 10

Oil Extraction Tax:

Block A. Pool Code: Enter the pool code assigned by the Commissioner. If reporting oil production from a well that produces from

more than one pool, complete a separate entry using the applicable code assigned to each pool (see Exhibits for a list of

assigned pool codes).

Block B. Well Code: Use the appropriate well code assigned by the Commissioner pursuant to N.D.C.C. chapter 57-51.1 and

N.D.A.C. chapter 81-09-03 as follows:

Code EN

A new vertical well is eligible for a 15-month exemption. The EN code must be used to report

the purchase of oil produced during the 15-month exempt period.

Code HE

A new horizontal well is eligible for a 24-month exemption. The HE code must be used to report

the sale of oil produced during the 24-month exempt period. The well bore of a horizontal well

consists of both the vertical and horizontal segments.

Code FE

A new well drilled and completed on Indian land is eligible for a 60-month exemption. The FE

code must be used to report the sale of oil produced during the 60-month exempt period.

Code NW

A new well is eligible for a reduced oil extraction tax rate of 4%. The NW code must be used

to report the purchase of oil produced after the EN, HE, or FE exempt period has expired.

Code HR

A horizontal reentry well, which is a vertical well bore reentered and recompleted horizontally, is

eligible for a 9-month exemption for each reentry. The HR code must be used to report the sale of

oil produced during the 9-month exempt period. After the 9-month exempt period expires, the taxable

status of the horizontal reentry well reverts to the well code that was applicable before the 9-month

exempt period.

Code IE

A well that meets the definition of a two-year inactive well is eligible for a 10-year exemption. The

IE code must be used to report the sale of oil produced during the 10-year exempt period. After the

10-year exempt period expires, the taxable status of the 2-year inactive well reverts to the well code

that was applicable before the 10-year exempt period.

Code S1

A stripper well property, with average daily production of oil not exceeding 10 barrels per day

for wells of a depth of 6,000 feet or less, is exempt from oil extraction tax.

Code S2

A stripper well property, with average daily production of oil not exceeding 15 barrels per day

for wells of a depth of more than 6,000 feet, but not more than 10,000 feet, is exempt from oil

extraction tax.

Code S3

A stripper well property, with average daily production of oil not exceeding 30 barrels per day

for wells of a depth of more than 10,000 feet, is exempt from oil extraction tax.

Code WP

A work-over project well is eligible for a 12-month exemption starting from the first day of the

third month after completion of the work-over. The WP code must be used to report the sale of

oil produced during the 12-month exempt period.

Code W4

A work-over project, completed on a well originally reported with a WW well code, is eligible

for a reduced oil extraction tax rate of 4% after the 12-month exempt period. The W4 code

must only be used as follows:

Well Code Before

Well Code During

Well Code After

12-month Exemption

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