Share with your friends

Oil and gas, marginal well factors, percentage depletion for 2019

Oil and gas, marginal well factors for 2019

The Internal Revenue Bulletin 2019-23 (dated June 3, 2019) includes the following IRS notices providing information for taxpayers involved in the oil and gas sector.


Related content

  • Notice 2019-36 provides the inflation adjustment factor and phase-out amount for the enhanced oil recovery credit for 2019. The notice concludes that because the reference price for the 2019 cal­endar year ($61.41) exceeds $28 multiplied by the inflation adjustment factor for the 2018 calendar year ($28 multiplied by 1.7334 = $12.88), the enhanced oil recovery credit for qualified costs paid or incurred in 2019 is phased out com­pletely by using a particular ratio. Read TaxNewsFlash

  • Notice 2019-37 provides the applicable reference price for qualified natural gas production from qualified marginal wells during tax years beginning in 2018. The notice reflects an estimate of the annual aver­age wellhead price per 1000 cubic feet for all domestic nat­ural gas for purposes of the credit in section 45I for calendar year 2018, is $2.68 per 1000 cubic feet (meaning the section 45I credit is $0.00 per 1,000 cubic feet of qualified natural gas produced from marginal wells).

  • Notice 2019-38 provides that the applicable percentage for purposes of determining the percentage depletion on marginal properties for 2019 is 15%.

Read the IRS notices in IRB 2019-23 [PDF 1.2 MB]

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us


Want to do business with KPMG?


loading image Request for proposal