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Glenn Hegar
Texas Comptroller of Public Accounts
Glenn Hegar
Texas Comptroller of Public Accounts
Glenn Hegar
Texas Comptroller of Public Accounts

taxes

TAX CREDIT FOR QUALIFYING LOW-PRODUCING GAS WELLS

Texas law provides a natural gas tax credit for low-producing gas wells for qualifying report periods.

Qualifications

  1. Production from a gas well for the prior three months cannot exceed an average of 90 Mcf per day, excluding gas flared pursuant to the rules of the Texas Railroad Commission.
  2. Production per well per day is determined by computing the average daily production from the well using the greater of the monthly production from the well as reported on:
    • the monthly well production reports filed with the Texas Railroad Commission, including amended reports; and
    • the monthly tax reports, including amended reports that are filed by producers and purchasers with the Comptroller’s office and who report as liable for tax.
    Production reports not filed with the Texas Railroad Commission and the Comptroller’s office for any of the prior three months will cause the well to be ineligible for the tax credit.
  3. Taxpayers must file Form AP-217, Texas Well Credit Application (PDF) for approval of the tax credit for a low-producing gas well, and all the required information must be provided. Any information listed below that is not provided in Form AP-217 will result in a delay in the approval process which could potentially cause a denial of a tax credit.

    Form AP-217 – Required Information Description
    Taxpayer number Texas 11-digit taxpayer number assigned by the Comptroller’s office.
    Lease information from Railroad Commission’s records
    List the three months that were prior to the beginning date of the tax credit for the qualifying low-producing well Example – The report period for the qualifying low-producing well began June 2020. The three months prior to June 2020 listed in Form AP-217 are March, April, and May 2020.
    Attached document, if applicable
    Information from authorized individual
    • Name and title;
    • Phone number;
    • Email address; and
    • Signature and signature date.

Certified Average Gas Price

  • The amount of tax credit can be 25 percent, 50 percent, or 100 percent and is based upon the Comptroller-certified average gas price posted on this webpage each month.
  • The average gas price is based upon daily index prices for the prior three months for each report period.

Four-Year Statute of Limitations

  • Four years from the due date of a report period determines the four-year statute of limitation date.
  • Form AP-217 and tax reports must be postmarked by the four-year statute of limitation date of the qualifying report period.
  • The four-year statute of limitations does not apply to the prior three months listed on Form AP-217.

Casinghead Gas and Condensate

Production of casinghead gas from an oil well and condensate from a gas well are not eligible for the tax credit of a low-producing well.

Filing Instructions and Examples for Qualifying Low-Producing Wells

Price Conditions

Gas from qualified wells becomes eligible for different levels of credit from natural gas tax based upon the Comptroller-certified average price for the reporting month.

Average Taxable Gas Price Credit
More than $3.50 No credit
Over $3 to $3.50 25 percent credit
Over $2.50 to $3 50 percent credit
$2.50 or less 100 percent credit

The Comptroller-certified average price of gas to be used in these calculations will be posted in the Texas Register and on this website. When the average price falls within one of the categories listed above, gas will be allowed the corresponding level of Credit for that reporting month.

Pricing Schedules and Credit Eligibility by Month
Report Period Price of Gas Eligibility
September 2020 $0.83/Mcf Eligible for 100 Percent Credit
August 2020 $0.71/Mcf Eligible for 100 Percent Credit
July 2020 $0.74/Mcf Eligible for 100 Percent Credit
June 2020 $0.81/Mcf Eligible for 100 Percent Credit
May 2020 $0.91/Mcf Eligible for 100 Percent Credit
April 2020 $1.02/Mcf Eligible for 100 Percent Credit
March 2020 $1.14/Mcf Eligible for 100 Percent Credit
February 2020 $1.26/Mcf Eligible for 100 Percent Credit
January 2020 $1.28/Mcf Eligible for 100 Percent Credit
2019
2019
Report Period Price of Gas Eligibility
December 2019 $1.30/Mcf Eligible for 100 Percent Credit
November 2019 $1.23/Mcf Eligible for 100 Percent Credit
October 2019 $1.27/Mcf Eligible for 100 Percent Credit
September 2019 $1.29/Mcf Eligible for 100 Percent Credit
August 2019 $1.44/Mcf Eligible for 100 Percent Credit
July 2019 $1.58/Mcf Eligible for 100 Percent Credit
June 2019 $1.78/Mcf Eligible for 100 Percent Credit
May 2019 $1.82/Mcf Eligible for 100 Percent Credit
April 2019 $1.93/Mcf Eligible for 100 Percent Credit
March 2019 $2.17/Mcf Eligible for 100 Percent Credit
February 2019 $2.60/Mcf Eligible for 50 Percent Credit
January 2019 $2.71/Mcf Eligible for 50 Percent Credit
2018
2018
Report Period Price of Gas Eligibility
December 2018 $2.54/Mcf Eligible for 50 Percent Credit
November 2018 $2.24/Mcf Eligible for 100 Percent Credit
October 2018 $2.10/Mcf Eligible for 100 Percent Credit
September 2018 $2.07/Mcf Eligible for 100 Percent Credit
August 2018 $2.06/Mcf Eligible for 100 Percent Credit
July 2018 $2.09/Mcf Eligible for 100 Percent Credit
June 2018 $2.11/Mcf Eligible for 100 Percent Credit
May 2018 $2.06/Mcf Eligible for 100 Percent Credit
April 2018 $2.17/Mcf Eligible for 100 Percent Credit
March 2018 $2.17/Mcf Eligible for 100 Percent Credit
February 2018 $2.29/Mcf Eligible for 100 Percent Credit
January 2018 $2.23/Mcf Eligible for 100 Percent Credit
2017
2017
Report Period Price of Gas Eligibility
December 2017 $2.28/Mcf Eligible for 100 Percent Credit
November 2017 $2.22/Mcf Eligible for 100 Percent Credit
October 2017 $2.19/Mcf Eligible for 100 Percent Credit
September 2017 $2.13/Mcf Eligible for 100 Percent Credit
August 2017 $2.20/Mcf Eligible for 100 Percent Credit
July 2017 $2.31/Mcf Eligible for 100 Percent Credit
June 2017 $2.39/Mcf Eligible for 100 Percent Credit
May 2017 $2.34/Mcf Eligible for 100 Percent Credit
April 2017 $2.30/Mcf Eligible for 100 Percent Credit
March 2017 $2.38/Mcf Eligible for 100 Percent Credit
February 2017 $ 2.32/Mcf Eligible for 100 Percent Credit
January 2017 $ 2.20/Mcf Eligible for 100 Percent Credit
2016
2016
Report Period Price of Gas Eligibility
December 2016 $ 1.89/Mcf Eligible for 100 Percent Credit
November 2016 $1.72/Mcf Eligible for 100 Percent Credit
October 2016 $1.60/Mcf Eligible for 100 Percent Credit
September 2016 $1.56/Mcf Eligible for 100 Percent Credit
August 2016 $1.46/Mcf Eligible for 100 Percent Credit
July 2016 $1.29/Mcf Eligible for 100 Percent Credit
June 2016 $1.10/Mcf Eligible for 100 Percent Credit
May 2016 $1.05/Mcf Eligible for 100 Percent Credit
April 2016 $1.14/Mcf Eligible for 100 Percent Credit
March 2016 $1.22/Mcf Eligible for 100 Percent Credit
February 2016 $ 1.34/Mcf Eligible for 100 Percent Credit
January 2016 $ 1.37/Mcf Eligible for 100 Percent Credit
2015
2015
Report Period Price of Gas Eligibility
December 2015 $ 1.48/Mcf Eligible for 100 Percent Credit
November 2015 $1.55/Mcf Eligible for 100 Percent Credit
October 2015 $1.64/Mcf Eligible for 100 Percent Credit
September 2015 $1.71/Mcf Eligible for 100 Percent Credit
August 2015 $1.81/Mcf Eligible for 100 Percent Credit
July 2015 $1.82/Mcf Eligible for 100 Percent Credit
June 2015 $1.89/Mcf Eligible for 100 Percent Credit
May 2015 $1.91/Mcf Eligible for 100 Percent Credit
April 2015 $2.05/Mcf Eligible for 100 Percent Credit
March 2015 $2.32/Mcf Eligible for 100 Percent Credit
February 2015 $2.77/Mcf Eligible for 50 Percent Credit
January 2015 $3.02/Mcf Eligible for 25 Percent Credit
2014
2014
Report Period Price of Gas Eligibility
December 2014 $3.12/Mcf Eligible for 25 Percent Credit
November 2014 $3.02/Mcf Eligible for 25 Percent Credit
October 2014 $3.08/Mcf Eligible for 25 Percent Credit
September 2014 $3.25/Mcf Eligible for 25 Percent Credit
August 2014 $3.41/Mcf Eligible for 25 Percent Credit
July 2014 $3.57/Mcf Not Eligible for Credit
June 2014 $3.56/Mcf Not Eligible for Credit
May 2014 $3.74/Mcf Not Eligible for Credit
April 2014 $3.74/Mcf Not Eligible for Credit
March 2014 $3.70/Mcf Not Eligible for Credit
February 2014 $3.30/Mcf Eligible for 25 Percent Credit
January 2014 $3.07/Mcf Eligible for 25 Percent Credit
2013
2013
Report Period Price of Gas Eligibility
December 2013 $2.89/Mcf Eligible for 50 Percent Credit
November 2013 $2.82/Mcf Eligible for 50 Percent Credit
October 2013 $2.82/Mcf Eligible for 50 Percent Credit
September 2013 $2.87/Mcf Eligible for 50 Percent Credit
August 2013 $3.05/Mcf Eligible for 25 Percent Credit
July 2013 $3.20/Mcf Eligible for 25 Percent Credit
June 2013 $3.19/Mcf Eligible for 25 Percent Credit
May 2013 $2.99/Mcf Eligible for 50 Percent Credit
April 2013 $2.78/Mcf Eligible for 50 Percent Credit
March 2013 $2.71/Mcf Eligible for 50 Percent Credit
February 2013 $2.82/Mcf Eligible for 50 Percent Credit
January 2013 $2.85/Mcf Eligible for 50 Percent Credit
2012
2012
Report Period Price of Gas Eligibility
December 2012 $2.71/Mcf Eligible for 50 Percent Credit
November 2012 $2.47/Mcf Eligible for 100 Percent Credit
October 2012 $2.33/Mcf Eligible for 100 Percent Credit
September 2012 $2.23/Mcf Eligible for 100 Percent Credit
August 2012 $2.14/Mcf Eligible for 100 Percent Credit
July 2012 $1.89/Mcf Eligible for 100 Percent Credit
June 2012 $1.84/Mcf Eligible for 100 Percent Credit
May 2012 $1.86/Mcf Eligible for 100 Percent Credit
April 2012 $2.05/Mcf Eligible for 100 Percent Credit
March 2012 $2.32/Mcf Eligible for 100 Percent Credit
February 2012 $2.60/Mcf Eligible for 50 Percent Credit
January 2012 $2.85/Mcf Eligible for 50 Percent Credit
2011
2011
Report Period Price of Gas Eligibility
December 2011 $2.93/Mcf Eligible for 50 Percent Credit
November 2011 $2.97/Mcf Eligible for 50 Percent Credit
October 2011 $3.08/Mcf Eligible for 25 Percent Credit
September 2011 $3.26/Mcf Eligible for 25 Percent Credit
August 2011 $3.35/Mcf Eligible for 25 Percent Credit
July 2011 $3.34/Mcf Eligible for 25 Percent Credit
June 2011 $3.23/Mcf Eligible for 25 Percent Credit
May 2011 $3.18/Mcf Eligible for 25 Percent Credit
April 2011 $3.26/Mcf Eligible for 25 Percent Credit
March 2011 $3.34/Mcf Eligible for 25 Percent Credit
February 2011 $3.35/Mcf Eligible for 25 Percent Credit
January 2011 $3.12/Mcf Eligible for 25 Percent Credit
2010
2010
Report Period Price of Gas Eligibility
December 2010 $3.02/Mcf Eligible for 25 Percent Credit
November 2010 $3.07/Mcf Eligible for 25 Percent Credit
October 2010 $3.34/Mcf Eligible for 25 Percent Credit
September 2010 $3.57/Mcf Not Eligible for Credit
August 2010 $3.55/Mcf Not Eligible for Credit
July 2010 $3.42/Mcf Eligible for 25 Percent Credit
June 2010 $3.29/Mcf Eligible for 25 Percent Credit
May 2010 $3.58/Mcf Not Eligible for Credit
April 2010 $3.99/Mcf Not Eligible for Credit
March 2010 $4.27/Mcf Not Eligible for Credit
February 2010 $4.12/Mcf Not Eligible for Credit
January 2010 $3.90/Mcf Not Eligible for Credit
2009
2009
Report Period Price of Gas Eligibility
December 2009 $3.41/Mcf Eligible for 25 Percent Credit
November 2009 $3.06/Mcf Eligible for 25 Percent Credit
October 2009 $2.74/Mcf Eligible for 50 Percent Credit
September 2009 $2.87/Mcf Eligible for 50 Percent Credit
August 2009 $3.04/Mcf Eligible for 25 Percent Credit
July 2009 $3.06/Mcf Eligible for 25 Percent Credit
June 2009 $3.09/Mcf Eligible for 25 Percent Credit
May 2009 $3.22/Mcf Eligible for 25 Percent Credit
April 2009 $3.64/Mcf Not Eligible for Credit
March 2009 $4.14/Mcf Not Eligible for Credit
February 2009 $4.76/Mcf Not Eligible for Credit
January 2009 $5.16/Mcf Not Eligible for Credit
2008
2008
Report Period Price of Gas Eligibility
December 2008 $5.55/Mcf Not Eligible for Credit
November 2008 $5.91/Mcf Not Eligible for Credit
October 2008 $7.01/Mcf Not Eligible for Credit
September 2008 $8.24/Mcf Not Eligible for Credit
August 2008 $9.13/Mcf Not Eligible for Credit
July 2008 $8.95/Mcf Not Eligible for Credit
June 2008 $8.22/Mcf Not Eligible for Credit
May 2008 $7.41/Mcf Not Eligible for Credit
April 2008 $6.90/Mcf Not Eligible for Credit
March 2008 $6.61/Mcf Not Eligible for Credit
February 2008 $6.44/Mcf Not Eligible for Credit
January 2008 $6.25/Mcf Not Eligible for Credit
2007
2007
Report Period Price of Gas Eligibility
December 2007 $5.87/Mcf Not Eligible for Credit
November 2007 $5.49/Mcf Not Eligible for Credit
October 2007 $5.37/Mcf Not Eligible for Credit
September 2007 $5.65/Mcf Not Eligible for Credit
August 2007 $5.39/Mcf Not Eligible for Credit
July 2007 $5.82/Mcf Not Eligible for Credit
June 2007 $6.16/Mcf Not Eligible for Credit
May 2007 $6.50/Mcf Not Eligible for Credit
April 2007 $6.42/Mcf Not Eligible for Credit
March 2007 $6.18/Mcf Not Eligible for Credit
February 2007 $6.17/Mcf Not Eligible for Credit
January 2007 $6.29/Mcf Not Eligible for Credit
2006
2006
Report Period Price of Gas Eligibility
December 2006 $6.25/Mcf Not Eligible for Credit
November 2006 $5.69/Mcf Not Eligible for Credit
October 2006 $5.40/Mcf Not Eligible for Credit
September 2006 $5.63/Mcf Not Eligible for Credit
August 2006 $5.46/Mcf Not Eligible for Credit
July 2006 $5.75/Mcf Not Eligible for Credit
June 2006 $5.91/Mcf Not Eligible for Credit
May 2006 $6.24/Mcf Not Eligible for Credit
April 2006 $6.78/Mcf Not Eligible for Credit
March 2006 $8.62/Mcf Not Eligible for Credit
February 2006 $9.82/Mcf Not Eligible for Credit
January 2006 $11.061/Mcf Not Eligible for Credit
2005
2005
Report Period Price of Gas Eligibility
December 2005 $10.68/Mcf Not Eligible for Credit
November 2005 $10.03/Mcf Not Eligible for Credit
October 2005 $8.35/Mcf Not Eligible for Credit
September 2005 $6.95/Mcf Not Eligible for Credit

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