At-risk rules are tax laws designed to limit the amount of tax losses an investor can claim from certain industries, including oil and gas, movie production, farming, and real estate. These rules ensure that losses are deductible only to the extent of money the equity investor stands to lose.
Discovery value accounting is a widely used method in the USA for extractive enterprises, where increases in discovered reserves elevate the value of assets and predict future earnings.
The extractive industry involves the extraction of raw materials, such as minerals and metals, from the earth. This includes various forms of mining to obtain resources such as copper, coal, oil, natural gas, and other valuable minerals.
Costs incurred in drilling, testing, completing, and reworking oil and gas wells, such as labor, core analysis, fracturing, drill stem testing, engineering, fuel, geologists' expenses; as well as abandonment losses, management fees, delay rentals, and similar expenses.
A lease bonus is an amount paid to a lessor to induce them to execute a mineral lease, entitling the lessee to explore, develop, and produce minerals from the leased area.
Mineral rights are the privileges granted to an individual or entity to extract and profit from the sale of natural resources such as oil, gas, and other minerals located on or beneath the surface of a piece of land. These rights can be sold or leased separately from the ownership of the land itself.
The Percentage Depletion Method permits a taxpayer with an economic interest in a mineral deposit to deduct a specified percentage of the gross income from the deposit instead of focusing solely on cost depletion.
A tax designed to ensure the UK government obtains a share in the profits from oil and gas extraction, primarily focused on activities in the North Sea.
Petroleum Revenue Tax (PRT) is a tax levied on the profits made from the extraction of oil and gas in the UK continental shelf. It was introduced to ensure fair taxation on profits from oil and gas extraction.
