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Dom W. Greco, for petitioner.
Michael A. Yost, Jr. and Edward F. Peduzzi, Jr., for
respondent.
OPINION
COLVIN, Judge: On August 3, 1998, respondent issued two
notices of final partnership administrative adjustment to S/V
Drilling Partners (S/V), a partnership, in which respondent
determined adjustments to S/V’s partnership returns for the tax
years ending December 31, 1993 and 1994. On August 18, 1998,
Snyder Armclar Gas Co. (Snyder), S/V’s tax matters partner,
petitioned the Court to redetermine respondent’s adjustments to
partnership items.
In 1993 and 1994, S/V sold 32,410 barrels of oil equivalent
(BOE’s)1 of natural gas produced from nonconventional sources,
consisting of 15,483 BOE’s of gas produced from a tight formation
that was not Devonian shale and 16,927 BOE’s of gas produced from
both a tight formation and Devonian shale.
The issue for decision is the amount of S/V’s section 29
credit. We hold that S/V is allowed a section 29 credit equal to
(1) 15,483 times $3, and (2) 16,927 times $3 indexed as provided
in the first sentence of section 29(b)(2).
1 A barrel of oil contains about 5.8 million British
thermal units (Btu’s).
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