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Mississippi signs legislation to reduce severance tax on horizontally drilled wells

JACKSON, Miss. – Legislation that will dramatically reduce the state’s tax rate for oil and natural gas companies that use horizontal drilling was recently signed into law. Gov. Phil Bryant affirmed House Bill 1698 on April 23.

The bill reduces the severance tax from 6% to 1.3%, a reduction of almost 80 percent, for oil and gas extracted from horizontally drilled wells for a period of 30 months or until the payout of the well. The legislation applies to all qualified horizontally drilled wells between July 1, 2013 and June 30, 2018.

The emerging Tuscaloosa Marine Shale development in southwest Mississippi is projected to produce a very high-quality oil at substantial quantities. Experts anticipate that once full-scale production commences, the Tuscaloosa marine shale will be one of the most active shale plays in the United States. Several companies are currently undergoing preliminary drilling tests in the play.

05/14/2013

 

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