"An Act extending and amending the requirements applicable to the credit that may be claimed for certain oil and gas exploration expenses incurred in Cook Inlet against oil and gas properties production (severance) taxes. "

The Senate and House Resources Committees held a joint committee meeting in Kenai in February 2005.

The purpose of the meeting was to receive testimony from individuals and companies doing oil and/or natural gas business in the Cook Inlet basin. The committee heard comments and suggestions on methods to improve the business conditions in the oil and natural gas industry.

One of those suggestions was the need to revise the exploration incentive credits that were passed in 2003 for the Cook Inlet basin.

The Cook Inlet basin differs substantially from other areas of the state and subsequently warrants this approach. It was the first area of the state to be explored and then developed for oil and gas production. As a result, it has some of the oldest fields in Alaska and most of the currently producing platforms are declining annually. With few exceptions, drilling an exploration well that is "outside" the existing 3-mile limitation effectively exempted the entire Cook Inlet basin from any credits.

This bill remedies that situation but at the same time, requires the commissioner to review information submitted by the explorer within a 60-day time frame and further, limits the maximum credits allowed to not exceed $20,000,000.

SB 163

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