Fundamentals of Oil and Gas Taxation

Transcription

1 COurse Fundamentals of Oil and Gas Taxation Houston Marriott West Loop by The Galleria EUCI is authorized by IACET to offer 1.0 CEUs for the course. EUCI is authorized by CPE to offer 12 credits for this program. 1

2 Overview Exploration, development and producing companies and their investors in the oil and gas industry face a unique set of federal income tax rules. This industry has specialized capital cost recovery rules for geological and geophysical costs, intangible drilling and development costs and depletion; complex rules for transfers of oil and gas property interests (pool of capital, sale versus lease); and, partnership rules. Join us as we discuss the intricacies and economic effects of these rules. We will identify at what time a taxpayer must make an election to currently deduct intangible drilling and development costs. We will examine how, after making that election, the taxpayer can choose to capitalize and amortize some or all of its intangible drilling and development costs. LEARNING OUTCOMES Attendees to this course will: Discuss a general overview of federal income taxation on oil and gas Describe the types of mineral property interests Examine the concepts of economic interest and unit of property Explain how acquisition, geological, geophysical, intangible drilling and development costs are treated Discuss how delay rentals and shut-in royalties are treated Apply the Uniform Capitalization Rules to oil and gas development Apply cost and percentage depletion methods Discuss the various types of conveyances of mineral interests and the Pool of Capital Doctrine Examine contractual joint ventures and joint operating agreements, and the election to be excluded from the partnership tax rules Explain specialized oil and gas tax rules for partnerships and limited liability companies Interpret when to consider the use of the API Model Tax Partnership Agreement Discuss how exploration, development and production of oil and gas properties are financed tax efficiently Explain how carved-out volumetric and dollar-denominated production payments play a role in the financing decision who should attend Tax accountants new to the oil and gas industry Tax consultants for oil and gas clients Attorneys with oil and gas clients Professionals looking for a refresher course in oil and gas taxation Oil and gas executives and managers Project managers and analysts performing project economics on an after-tax basis Managers in financial institutions providing capital to the oil and gas industry Investors in publicly traded partnerships that own oil and gas properties 2

3 Agenda Monday, October 7, :00 8:30 a.m. registration and Continental Breakfast 8:30 a.m. 4:00 p.m. Course Timing 12:00 1:00 p.m. Group Luncheon Tuesday, October 8, :00 8:30 a.m. Continental Breakfast 8:30 a.m. 12:00 p.m. Course Timing introduction to the Oil and Gas Industry Kinds of mineral property interests mineral fees, working interests, royalty interests, overriding royalty interests and production payments The economic interest concept The unit of property concept A acquisition, Exploration and Development Costs Mineral acquisition costs, including lease bonus and purchase price Delay rentals and shut-in royalties Geological and geophysical costs Intangible drilling and development costs, including the preference rules for Alternative Minimum Tax Application of the Uniform Capitalization Rules to oil and gas operations Producing Operations Cost and percentage depletion methods Depreciation of lease and well equipment, platforms and other tangible personal property Lease operating expenses Section 199 manufacturing deduction Casualty losses and specified liability losses Enhanced oil recovery operations Commodity price hedging Conveyances of Mineral Interests Leasing and subleasing Sales and exchanges, including like-kind exchanges Farmouts, sharing arrangements, carried interests and the Pool of Capital Doctrine Loss deductions for abandonments and worthlessness Structuring for capital gain or ordinary income Joint Operations, Including Oil and Gas Partnerships Contractual joint ventures and joint operating agreements Limited partnerships and limited liability companies Electing out of the partnership tax rules Using tax partnerships to optimize the after-tax economics of the trade The API Model Tax Partnership Agreement Financing Exploration, Development and Production of Oil and Gas Properties Carved-out volumetric and dollar-denominated production payments Sale of overriding royalty interests Drilling funds Master limited partnerships and royalty trusts 3

4 INSTRUCTORs John T. Bradford / Attorney / Liskow & Lewis Mr. Bradford practices energy and natural resources taxation at the state, federal, and international levels. His practice involves advising clients on the tax consequences of their acquisitions, dispositions, hedging activities, and day-to-day business operations. He has represented clients before the Internal Revenue Service on audit, administrative appeal, and for private letter ruling requests. He has extensive experience in the energy and natural resources industry, having practiced for more than 18 years as a tax lawyer for Exxon Corporation (now Exxon Mobil Corporation), having worked in energy and natural resource investment banking at JP Morgan Securities, and having most recently advised clients as a principal in KPMG LLP s Washington National Tax practice. Mr. Bradford is a frequent speaker on energy and natural resource taxation matters, having presented to the American Petroleum Institute Federal Tax Forum, the University of Texas Parker C. Fielder Oil and Gas Tax Conference, the Rocky Mountain Mineral Law Foundation, the American Bar Association Section of Taxation Energy and Environmental Taxes Committee, the Houston Bar Association Tax and Oil and Gas Sections, the South Texas College of Law Energy Symposium, and KPMG LLP s Global Energy Conference. His articles have been published by The Journal of Taxation, the Rocky Mountain Mineral Law Foundation, Oil, Gas & Energy Quarterly, Oil and Gas Financial Journal, and the KPMG Global Energy Institute. Mr. Bradford has been a guest lecturer on oil and gas taxation at Georgetown University School of Law and currently is Adjunct Professor at the University of Illinois College of Law, where he teaches a course on Energy and Natural Resource Transactions. Robert A. Swiech / Tax Director / KPMG Mr. Swiech has over 30 years experience in the energy and mining industries. Before joining KPMG in 2006, he specialized in natural resource tax litigation at Oreck, Bradley, Crighton, Adams and Chase LLP, a tax litigation boutique law firm. Prior to that, Mr. Swiech practiced as an associate general tax counsel for both Amoco Corporation and post-merger with BP America Company, one of the largest multinational integrated oil and gas companies in the world which also owned diverse natural resource interests in coal, copper, carbon dioxide, gold, sulfur and iodine. Mr. Swiech is a member of the American Bar Association and was the chair of the Committee on Energy and Environmental Taxes, Tax Section from Mr. Swiech previously chaired the American Petroleum Institute s General Tax Committee and was the chair of its Joint Operations Committee for 17 years. Mr. Swiech is a frequent speaker on natural resource taxation matters, having presented to the American Petroleum Institute Federal Tax Forum, the American Petroleum Institute Joint Federal Tax Conference, the University of Texas Parker Fielder Oil and Gas Tax Conference, the American Bar Association Energy and Environmental Taxes Committee, the Federal Bar Association and the Internal Revenue Service. 4

5 Instructional Methods PowerPoint presentations will be used in this program. Requirements for Successful Completion of Program Participants must sign in/out each day, be in attendance for the entirety of the course to be eligible for continuing education credit. Credits EUCI has been approved as an Authorized Provider by the International Association for Continuing Education and Training (IACET), 1760 Old Meadow Road, Suite 500, McLean, VA In obtaining this approval, EUCI has demonstrated that it complies with the ANSI/IACET Standards, which are widely recognized as standards of good practice internationally. As a result of its Authorized Provider membership status, EUCI is authorized to offer IACET CEUs for its programs that qualify under the ANSI/IACET Standards. EUCI is authorized by IACET to offer 1.0 CEUs for the course. EVENT LOCATION EUCI is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: Upon successful completion of this event, program participants interested in receiving CPE credits will receive a certificate of completion. EUCI is authorized by CPE to offer 12.0 credits for this program. Program Level 1: Beginner and Intermediate Delivery Method: Group Live Advanced Preparation: None A room block has been reserved at the Houston Marriott West Loop by The Galleria, for the nights of October 6-7, Room rates are $179, plus applicable tax. Call for reservations and mention the EUCI course to get the group rate. The cutoff date to receive the group rate is September 15, 2013, but as there are a limited number of rooms available at this rate, the room block may close sooner. Please make your reservations early. PROCEEDINGS The proceedings of the course will be published, and one copy will be distributed to each registrant at the course. 5

6 Event location Mail Directly To: please register the following A room block has been reserved at the Houston Marriott West Loop by The Galleria, for the nights of October 6-7, Room rates are $179, plus applicable tax. Call for reservations and mention the EUCI course to get the group rate. The cutoff date to receive the group rate is September 15, 2013, but as there are a limited number of rooms available at this rate, the room block may close sooner. Please make your reservations early. Fundamentals of Oil and Gas Taxation : US $1395 Early bird on or before september 27, 2013: US $1195 EUCI s E EUCI has gathered during its 26 years organizing conferences. Sign me up for Energize Weekly. How did you hear about this event? (direct , colleague, speaker(s), etc.) Print Name Job Title Company What name do you prefer on your name badge? Address City State/Province Zip/Postal Code Country Telephone List any dietary or accessibility needs here CREDIT CARD Name on Card Account Number Billing Address Billing City Billing State Billing Zip Code/Postal Code exp. Date Security Code (last 3 digits on the back of Visa and MC or 4 digits on front of AmEx) OR Enclosed is a check for $ to cover registrations. All cancellations received on or before September 6, 2013, will be subject to a US $195 processing fee. Written cancellations received after this date will create a credit of the tuition (less processing fee) good toward any other EUCI event or publication. This credit will be good for six months. In case of event cancellation, EUCI s liability is limited to refund of the event registration fee only. For more information regarding administrative policies, such as complaints and refunds, please contact our offices at (201) EUCI reserves the right to alter this program without prior notice. 6