Depletion Percentages

The percentages allowable for marginal and non-marginal wells changes from year to year. The Depletion Percentages screen will allow you to enter the allowable percentages for the given year.

Year
Enter the year that the depletion percentages apply.

No Income Limitation
Mark this field if there is no income limit for the Net Income Limitation percentage.

Net Income Limit Pct
Enter the percentage of net income the depletion amount is limited to. This percentage is multiplied by the net income the owner received from the well. The result is then compared to the tentative depletion. If the depletion is greater than the net income limit, the allowable depletion is reduced to the net income limit. If there is no income limit, check the No Income Limitation box.

Marginal Pct
Enter the percentage allowable for depletion of marginal wells. A marginal well is defined as a well producing less than 10 BBLs a day. Gas production is converted to BBL by dividing the MCF produced by 5.8.

Non-Marginal Pct
Enter the percentage allowable for depletion of non-marginal wells. A non-marginal well is defined as a well producing 10 or more BBLs a day. Gas production is converted to BBL by dividing the MCF produced by 5.8.