Tax panel hears industry pitch to create temporary "development incentive well" exemption in SB 2397

The North Dakota Senate Finance and Taxation Committee on Wednesday considered an amendment to Senate Bill 23 97 (SB 2397) that would establish a temporary tax exemption for certified "development incentive wells," a narrowly targeted incentive sponsors said would spur technology testing, exploratory wells and enhanced oil recovery (EOR) work in existing spacing units.

Committee Chairman Hedlund opened the discussion and Representative Doctor introduced the amendment and the bill sponsor briefing. Nathan Anderson, director of the Department of Mineral Resources, and Timothy Nesheim, head of the subsurface section and manager of the Wilson Layered Core and Sample Library in Grand Forks, presented geological and production data; representatives from Continental Resources and the North Dakota Petroleum Council also testified in support.

Why it matters: Sponsors and industry witnesses said the incentive aims to encourage operators to test new drilling and completion techniques in existing spacing units where reservoir complexity and past industry practice have left economically recoverable oil behind. Proponents argued a temporary, limited exemption will produce a net fiscal return if successful exploration or EOR methods unlock additional long‑term production.

Committee discussion and testimony

Representative Doctor described the bill as responsive to pressures in the state budget and said "stripper wells are gonna be coming more and more" and that an incentive is needed for exploratory…