N.D.C.C. § 57-51-02.3 — Valuation of oil - Alternatives - Exceptions

The gross value at the well for oil is the price paid for the oil under an arm's -length contract
between the producer and the purchaser less, when applicable, transportation costs associated
with moving the oil from the point of production to the point of sale under the contract. In the
absence of an arm's-length contract, the gross value at the well for oil is established by the first
applicable of the following methods:
1. The price paid under an arm's -length contract, to which the person paying the tax is a
party, for the purchase or sale of oil of like kind, character, and quality, in the same
field or, if none, in a nearby field, less, when applicable, transportation costs
associated with moving the oil from the point of production to the point of sale.
2. The price paid under an arm's -length contract, between parties other than the person
paying the tax, for the purchase or sale of oil of like kind, character, and quality, in the
same field or, if none, in a nearby field, less, when applicable, transportation costs
associated with moving the oil from the point of production to the point of sale.
3. The value determined by consideration of the posted price relevant in valuing oil of like
kind, character, and quality, in the same field or, if none, in a nearby field, less, when
applicable, adjustments for transportation costs to reflect the differential between the
value at the point of production and the value at the location reflected in the posted
price.