109 T.C. No. 6 UNITED STATES TAX COURT NIELSON-TRUE PARTNERSHIP, TRUE OIL COMPANY, TAX MATTERS PARTNER, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket Nos. 12069-95, 3980-96. Filed September 9, 1997. P owned an interest in two wells in the same tight formation gas field. The field had been established under statutory procedures as a tight formation field. One well had been certified as producing tight formation gas under the established Federal statutory procedures, and the other had not. Congress provided a tax credit incentive to develop, among other fuels, tight formation gas. Sec. 29(c)(2)(A), I.R.C., requires that, as a prerequisite to the credit, "the determination of whether any gas is produced from * * * a tight formation shall be made in accordance with section 503 of the Natural Gas Policy Act of 1978 [NGPA]", Pub. L. 95-621, 92 Stat. 3350, 3397, 15 U.S.C. sec. 3413 (1988). NGPA sec. 503 was also the procedural route to qualifying individual tight formation gas wells for incentive (higher than ceiling) price treatment administered by the Federal Energy Regulatory Commission (FERC). Under NGPA sec. 503,Page: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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