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Alias Born 11/20/2003

Re: ChocChunk post# 1713

Friday, 12/31/2004 10:31:43 AM

Friday, December 31, 2004 10:31:43 AM

Post# of 3023
One reason for pumping oil first...

Gas wells start paying the government a 35% tax from the first day they pump.

Oil wells have the added benefit that they are exempt from this tax on the first 15,000 barrels (if I have figured this correctly that would amount to $262,500 at $50 per barrel price, per well).

This makes for oil being the desired product to a cash short startup company as it gives them a chance to recover some of their resources/cash on the front end.

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