Eagle Ford Mineral Owners
Growing and Protecting Your Oil and Gas Income
Congratulations on the Eagle Ford Shale production found on your land. More than likely, the production income has changed your financial outlook and your tax liability is tremendous. If you are concerned about protecting and growing your income, please read on!
The portion of your production money that is earmarked for taxes can be invested in drilling projects to shelter your tax liability while creating additional oil and gas income. Thatís a win-win situation! Being part of a new field discovery is the goal, but whatever the result is, your investment in oil and gas well drilling offsets your tax liability very significantly. This is the best kept secret in the business!
U.S. tax law provides that 100% of the money invested in drilling is deductible. Specifically, the Intangible Drilling and Completion cost is 100% deductible in the year it is incurred, while the Tangible Drilling and Completion cost is amortized and depreciated.
Intangible Drilling and Completion Cost generally represent 60-85% of the investment, while Tangible Cost make up the balance. In addition, the Small Producerís Depletion Allowance provides for (at least) 15% of the income generated from production income to be written off annually, so you pay taxes on only 85% of your production income.
Bottom line is, the cost to invest in drilling to obtain oil and gas is 100% recoverable through tax write offs. This tax treatment was established to encourage drilling in the U.S. The tax treatment substantially offsets the risk of drilling, and shelters the money which would have otherwise been paid to Uncle Sam! We all know how much of that money is wasted!
Independent producers find a majority of new oil and gas field discoveries (including the Eagle Ford Shale, by the way). They are to the oil and gas industry what you ranchers and farmers are to the food industry. We have a lot in common when you think about it- we take a lot of risk and work very hard to provide the energy and food and that our country needs. We keep the Texas economy strong! .
Contact us directly, should you have an interest in learning more about the oil and gas drilling opportunities and other projects MPG has for you to consider. Thank you for the time spent in review!
Margaret P. Graham, President MPG Petroleum, Inc.
Ph: 1 210 822 7770 Fax: + 1 210 822 8988
MPG Petroleum, Inc.
Energy Plaza Building
8620 N. New Braunfels,
San Antonio, Texas 78217
www.mpgpetroleum.com "Fueling the Future"
Brochures and additional information are available by contacting MPG Petroleum, Inc.