114 T.C. No. 20
UNITED STATES TAX COURT
EXXON MOBIL CORPORATION AND AFFILIATED COMPANIES,
f.k.a. EXXON CORPORATION AND AFFILIATED COMPANIES,
Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket Nos. 18618-89, 18432-90. Filed May 3, 2000.
Held: For the years before the Court,
$204 million (reflecting petitioners’ 22-percent share
of a total $928 million) in estimated dismantlement,
removal, and restoration (DRR) costs relating to
fieldwide oil production equipment and facilities
located in the Prudhoe Bay oil field on the North Slope
of Alaska is not sufficiently fixed and definite to be
accruable under the all-events test of sec. 1.461-
1(a)(2), Income Tax Regs.
Held, further, for the years before the Court,
$24 million (reflecting petitioners’ 22-percent share
of a total $111 million) in estimated DRR costs
relating specifically to oil wells and to well drilling
sites located in the Prudhoe Bay oil field: (1) Is
sufficiently fixed, definite, and reasonably
determinable to satisfy the all-events accrual test of
the accrual method of accounting; (2) is not accruable
as a capital cost because such accrual would constitute
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