North Dakota Administrative Code Title 81 — Tax Commissioner
N.D. Admin. Code § 81-09-02-10
Condensate recovered from a gas stream
# 1.
For the purposes of this section, the following definitions apply: a. "Condensate" means all liquid hydrocarbons recovered from a gas stream in a gathering system after the custody transfer meter but before processing at a gas plant. Condensate is otherwise referred to as "pigging liquids", "gathering system condensate", or "drip". b. "Gross value" of condensate at the point of recovery means the price paid under an arm's length contract for the sale of oil as defined in North Dakota Century Code section 57-51-02.3. c. "Processing" means any process designed to remove elements or compounds, hydrocarbons and nonhydrocarbons, from gas, including absorption, adsorption, or refrigeration. Field processes that normally take place on or near the lease, such as natural pressure reduction, mechanical separation, heating, cooling, dehydration, and compression are not considered processing.
# 2.
Gross value at the well includes the value of condensate from associated and nonassociated production. There may be deducted from the gross value of condensate certain costs incurred to recover the condensate from a gas stream after the custody transfer meter. Effective January 1, 1995, the costs of recovery must be calculated and deducted from the gross value of condensate under either of the following methods: a. By multiplying fifteen percent times the gross value of the condensate, using a gross value that is finally determined by the commissioner. This method establishes conclusively the costs of recovery of the condensate from a gas stream; or b. By using reasonable actual costs incurred to recover the condensate from a gas stream after the custody transfer meter. Actual costs do not include proceeds retained under a gas sales or gas processing agreement between a producer and a purchaser or processor. If the method under this subdivision is elected, the costs of recovery must be fully substantiated upon request and are subject to audit by the commissioner. The value of condensate is included in gross value regardless of the point at which it is recovered. This includes condensate recovered at the lease site, gas gathering lines, compressor station, and inlet separator of a processing plant. The commissioner shall review the cost of recovery methods under subdivisions a and b of subsection 2 after the cost of recovery provision has been in effect for two years.
Amendment history
History: Effective August 1, 1986; amended effective April 1, 1995; June 1, 2002. General Authority: NDCC 57-51-21 Law Implemented: NDCC 57-51-02
Source: view the official PDF
In this article (40 sections)
- 81-09-01-01 · Source note not part of rule
- 81-09-01-02 · Headnote, cross-reference, and source note not part of…
- 81-09-02-01 · Definitions
- 81-09-02-02 · Procedure for review of commissioner's determination of…
- 81-09-02-03 · Procedure for refund of overpayments, duplicate payments,…
- 81-09-02-03.1 · Interest on refunds
- 81-09-02-03.2 · Procedure for limited review of amended returns…
- 81-09-02-04 · Due dates for filing a return and paying tax
- 81-09-02-05 · Extension of due date for filing a return or paying tax
- 81-09-02-06 · Penalty for failure to file a return and procedure for…
- 81-09-02-06.1 · Penalty and interest on delinquent tax
- 81-09-02-07 · Injected oil
- 81-09-02-08 · Determination of gross value
- 81-09-02-09 · Definition of arm's length contract
- 81-09-02-09.1 · Reduction from gas volumes and reporting
- 81-09-02-10 · Condensate recovered from a gas stream
- 81-09-02-11 · Tax reimbursement
- 81-09-02-12 · Postproduction costs for periods prior to July 1, 1991
- 81-09-02-13 · Measurement or determination of oil or gas production
- 81-09-02-14 · Taxation of volume gains
- 81-09-02-14.1 · Taxation of oil pipeline volume gains
- 81-09-02-15 · Exempt royalty interests
- 81-09-02-16 · Exemption for lease use gas
- 81-09-02-17 · Definition of gas base rate adjustment and tax rate
- 81-09-02-18 · Method for calculating the tax rate on gas
- 81-09-02-19 · Reporting requirements for producers and purchasers
- 81-09-02-20 · Waiver of requirement to file producer's report
- 81-09-03-01 · Application of oil and gas gross production tax rules to…
- 81-09-03-02 · Definitions
- 81-09-03-03 · Determination of a property - Operator's election to…
- 81-09-03-04 · Designation of a property on an individual well basis -…
- 81-09-03-05 · Rate reduction for qualifying secondary and tertiary…
- 81-09-03-05.1 · Tax incentives for qualifying secondary recovery…
- 81-09-03-05.2 · Tax incentives for qualifying tertiary recovery projects
- 81-09-03-05.3 · Reporting requirements for secondary and tertiary…
- 81-09-03-06 · New well exemption for vertical and horizontal wells
- 81-09-03-07 · Stripper well exemption
- 81-09-03-08 · Work-over exemption
- 81-09-03-09 · Trigger provision applicable to oil extraction tax rate
- 81-09-03-10 · Horizontal reentry well exemption