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The state waives its 6.5 percent oil extraction
tax if the monthly price of benchmark West Texas Intermediate (WTI)
crude at the Cushing, Oklahoma, transport hub falls below an
inflation-adjusted limit, set at $52.59 per barrel for 2015, for
five consecutive months.
For March, the average calculated price was $47.76 per barrel,
according to data from the North Dakota tax commissioner's
office. The March average was a drop from the February average
of $50.86 per barrel.
The tax break kicks in if the average monthly price is below
that $52.59 level for the next two months. If it is off even one
month, the clock resets. The tax returns if the average price
exceeds that level for a subsequent five consecutive months.
Lynn Helms, head of the state's Department of Mineral Resources
and the state's main oil regulator, had insisted at the
beginning of the year that he didn't expect the trigger to hit.
Last month, though, he changed his mind, saying low oil prices
likely would result in the cut.
The countdown, which has officially entered its third month out
of a possible five, holds the promise of crucial financial
incentive for oil producers and their contractors in the No. 2
oil-producing U.S. state as they grapple with a roughly 50
percent drop in crude prices since last summer.
(Reporting by Ernest Scheyder; Editing by Chizu Nomiyama)
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