S/V Drilling Partners, Snyder Armclar Gas Company, Tax Matters Partners - Page 6




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          a tight formation that was not Devonian shale and a double credit           
          for the 16,927 BOE’s it produced from a tight formation that was            
          also Devonian shale.  Thus, petitioner, in effect, contends that            
          S/V produced 49,337 BOE’s (i.e., 15,483 plus (2 X 16,927)) of gas           
          qualifying for the credit under section 29.                                 
               Respondent contends that S/V is entitled to a credit for               
          only 16,927 BOE’s of gas.  Respondent contends that S/V is                  
          entitled only to the larger of:                                             
               1.   A $3 per barrel credit for the 32,410 BOE’s of natural            
          gas S/V produced, or                                                        
               2.   A credit for the 16,927 BOE’s of natural gas S/V                  



               2(...continued)                                                        
                    (A) oil produced from shale and tar sands,                        
                    (B) gas produced from--                                           
                        (i) geopressured brine, Devonian shale, coal                 
                    seams, or a tight formation, or                                   
                        (ii) biomass, and                                            
                    (C) liquid, gaseous, or solid synthetic fuels                     
               produced from coal (including lignite), including such                 
               fuels when used as feedstocks.                                         
                         *    *    *    *    *    *    *                              
               (d) Other definitions and special rules.                               
                         *    *    *    *    *    *    *                              
                    (5) Barrel-of-oil equivalent.--The term “barrel-                  
               of-oil equivalent” with respect to any fuel means that                 
               amount of such fuel which has a Btu content of 5.8                     
               million * * *.                                                         





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