Senate committee hears bill to expand extraction‑tax incentive for non‑Bakken drilling

The Senate Finance and Taxation Committee heard House Bill 14‑83, which would adjust North Dakota’s extraction‑tax incentive to encourage drilling in formations outside the Bakken and Three Forks areas.

Sponsor Representative Craig Hedlund introduced the bill as an effort to broaden exploration and sustain statewide oil production by encouraging investment in other Williston Basin formations. The bill would reduce the oil extraction tax from 5% to 2% on an initial volume of production from qualifying wells outside the Bakken/Three Forks area, increase the eligible barrel amount for the reduced rate on a qualifying vertical well to 125,000 barrels, and extend the qualifying window to the first 36 months of initial production for non‑Bakken wells.

Brady Pelton of the North Dakota Petroleum Council said the change would help smaller and mid‑sized operators bridge drilling economics for conventional vertical wells. Pelton pointed to submitted maps and data showing the current statutory 10‑mile buffer around Bakken/Three Forks…