BP Prudhoe Bay Royalty: Other Events
The following excerpt is from the company's SEC filing
On April 14, 2013,
Alaska’s legislature passed an oil-tax reform bill amending the Alaska oil and gas production tax statutes, AS 43.55.10 et
seq. (the “Production Tax Statutes”) with the aim of encouraging oil production and investment in Alaska’s
oil industry. On May 21, 2013, Alaska Governor Sean Parnell signed the bill into law as chapter 10 of the 2013 Session laws of
Alaska (the “Act”). Among significant changes, the Act eliminated the monthly “progressivity” tax rate
(a rate determined by the average monthly production tax value of the oil produced, which was implemented by amendments to the
Production Tax Statutes in 2006 and 2007), increased the base rate from 25% to 35% and added a
stair-step per-barrel tax credit for oil production. This tax credit is based on the
gross value at the point of production per barrel of taxable oil and may not reduce a producer’s tax liability below the
“minimum tax” under the Production Tax Statutes. These changes became effective on January 1, 2014.
Pursuant to the
Letter Agreement, Production Taxes for the Trust’s Royalty Production will equal the tax for the relevant quarter, minus
the allowable monthly stair-step per-barrel tax credits for the Royalty Production during that quarter. If there is a “minimum
tax”-related limitation on the amount of the stair-step per-barrel tax credits that could otherwise be claimed for any quarter
during the year, any difference between that limitation as preliminarily determined on a quarterly basis and the actual limitation
for the entire year will be reflected in the payment to the Trust for the first quarter Royalty Production in the following year.
of the Act organized a petition drive to put a referendum to repeal the Act on the ballot in Alaska’s next statewide election.
On July 13, 2013 the referendum supporters made a timely submission of the signatures that they had gathered in support for the
referendum. The Alaska Division of Elections certified that there were enough valid signatures to place the referendum on the ballot
for the next statewide election, which will be the 2014 primary election on August 19, 2014, unless the Legislature, during its
regular session that began in January, 2014, schedules a special statewide election for an earlier date. If the Act is rejected
in the referendum, then the methodology for calculating Production Taxes on the Trust’s Royalty Production will revert back
to the methodology that was previously used before the effective date of the amendments to the Production Tax Statutes under the
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
The above information was disclosed in a filing to the SEC. To see this filing in its entirety, click here. BP Prudhoe Bay Royalty Trust next reports earnings on February 24, 2014.
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