Wednesday, November 15, 2017

House Tax Reform Vote Set, But Do Oil, Gas Companies Benefit?

The U.S. oil and gas industry would emerge from the first tax reform since 1986 relatively unaffected, though time will change some dynamics—for good and ill—and a few prized deductions are going away. Oil and gas companies stand to lose some tax provisions, including $1.3 billion in annual domestic production deductions. The highly leveraged E&P sector may also eventually see new caps on interest expenses as financially stifling—especially as commodity prices rise.  The industry is also losing some tax credits, mostly those that kick in at low commodity prices such as EOR credits that will have little impact. And the big headline, reduction in corporate rates to 20% from 35%, is more likely to benefit refiners since few E&Ps generate positive net income. “Corporate income tax matters less for energy than just about any other sector of the U.S. economy,” Pavel Molchanov, an analyst at Raymond James, said in a Nov. 6 report.
Source: Daily Dose of ShaleDirectories.com News

https://www.shaledirectories.com/blog/house-tax-reform-vote-set-but-do-oil-gas-companies-benefit/

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