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,
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