Reporting Instructions Form For Oil And Gas Taxes - North Dakota Office Of State Tax Commissioner Page 17
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42PROCEDURE FOR REPORTING CONDENSATE
FORMS REQUIRED
The T-12 Oil Report is used to report and pay the gross production and oil extraction tax due on condensate. When reporting
condensate, check the “yes” block on the T-12 worksheet and use the CON1 posting code. To claim exemptions or rate reductions, the
individual API, group, or unit number and pool code must be used. If reporting by station with a group number assigned by the
Commissioner, use well code WW and pool code 99.
Producer:
A producer who recovers condensate from a gas stream must file a monthly T-12 Oil Report if:
•
The condensate is recovered from a gas stream not sold to a processor, or
•
The condensate is recovered from a gas stream prior to the sale to a processor at a custody transfer meter.
A producer is not required to file a T-12 Oil Report for condensate recovered by a processor after the custody transfer meter.
Purchaser: A purchaser who recovers condensate from a gas stream after the custody transfer meter, but before processing at a gas
plant, must file a monthly T-12 Oil Report. This includes condensate recovered at the lease site, gas gathering lines, compressor station,
and inlet separator of a processing plant.
Pursuant to N.D.A.C. § 81-09-02-10, certain costs incurred to recover the condensate from a gas stream, after the custody transfer meter,
may be deducted from the gross value of the condensate. The costs of recovery must be calculated and deducted from the gross value
of the condensate under either of the following methods:
•
By multiplying 15% times the gross value of the condensate, or
•
By using reasonable actual costs incurred to recover the condensate from a gas stream after the custody transfer meter. The
costs of recovery under this method must be fully substantiated upon request and are subject to audit by the Commissioner.
PROCEDURE FOR REPORTING INJECTED OIL
Pursuant to N.D.A.C. § 81-09-02-07, injected oil includes, but is not limited to, what is commonly known as power oil, frac oil, and
load oil.
FORMS REQUIRED
The T-12 Oil Report is used to report and pay the gross production and oil extraction tax due on injected oil. When oil is produced from
one well but transported for use at a second well:
•
The volume of transported oil must be reported, and tax paid, by the producer on the T-12 Oil Report in the month that the oil
is transferred from the producing well. Use the API, group, or unit number of the well that originally produced the oil.
•
The transferred oil must be reported at the market value (i.e., average price per barrel) of other oil sold from the producing
well in the month of transfer. The gross production and oil extraction taxes are calculated on market value and remitted
by the producer.
•
In the month the transferred oil is recovered from the second well, the total sales volume should be reduced by the
transferred volume prior to being reported on the T-12 Oil Report.
•
The producer must retain adequate documentation to substantiate the transported oil’s initial production, transfer to a
second well, recovery from the second well, and ultimate sale. The producer is responsible for certifying to the
purchaser the transported oil volume that may be subtracted from the total sales volume.
Page 15
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