Oil & Gas Taxation

In the complex world of oil and gas taxation, experience counts. While oil and gas exploration and production carries significant tax benefits, it also carries significant risks. Like the industry itself, oil and gas taxation is a volatile field, and even now, key tax incentives face substantial challenges.

Our Tax team has been at the forefront of oil and gas tax innovation since Spindletop. Our founding partners developed many of the fundamental concepts of oil and gas taxation, and we continue that tradition of smart, driven tax leadership. Today, Jackson Walker is among the top oil and gas firms in the country and has been recognized as a Tier 1 firm nationally for Oil & Gas Law in U.S. News & World Report‘s Best Law Firms ranking.

We are deeply involved in tax structuring, planning and litigation for a broad spectrum of oil and gas clients, ranging from public energy companies to very broadly held private mineral interests, and from energy funds to sophisticated oil and gas investors.

Our work with oil and gas clients routinely includes:

  • Advising oil investment funds and their managers on maximizing their opportunities with respect to depletion and intangible drilling cost (IDC) deductions
  • Tax structuring of production payments and oil and gas tax partnerships
  • Facilitating nonprofit investments in the oil patch
  • Structuring investment in midstream assets

Our experience in oil and gas taxation is complemented by the extensive experience of our Environmental and Energy attorneys, who provide a broad range of services to the energy and renewable energy industries.

Our clients include large, publicly traded energy corporations, pipeline companies, energy services providers, independent producers and individual investors. Although we cannot take the risk out of oil and gas ventures, we enable clients to get the most from their investments by utilizing all available tax benefits. In many cases, we can help clients secure additional advantages through efficient tax structuring. At the state level, we focus on state & local tax planning, audit defense, and litigation, and we regularly assist clients with Texas franchise tax issues.

In a field as dynamic as oil and gas taxation, it is crucial to stay ahead of the curve. We continually educate our clients about proposed tax changes that target the oil and gas industry. Some recent proposals have included disallowing expensing for intangible drilling costs (IDCs), which can constitute up to 80 percent of drilling expenses; discontinuing the percentage depletion deduction and working interest exception; and ending the domestic manufacturing deduction. By staying on top of developments, we help clients take advantage of opportunities and develop tax-efficient strategies for the future.

Our excellence in oil and gas law is built on history and experience. Current members of our Tax section have provided trusted advice and innovative solutions to clients in the oil and gas industry for over 30 years.

  • Represented public energy company in the tax structuring of numerous oil and gas production payments, including for foreign investors totaling $290 million and public debt offering totaling $1.5 billion; also represented public energy company with capital restructuring in order to preserve NOLs
  • Represented two public companies in the creation of NOL-preserving poison pills
  • Represented several foreign inbound energy developers with planning $500 million of development for advantageous tax credits (wind, solar, biodiesel)
  • Assisted with restructuring of fund-owned major gas play
  • Represented client in the successful negotiation of EPC contracts with respect to (i) power generation facilities and (ii) certain oil and gas infrastructures in order to realize benefits from available Texas sales and use tax exemptions

Related Practices

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