From The Institute for Policy Integrity Energy Tax Breaks Wiki
Tax Code Section Number
Year the provision went into effect
Public Law 101-508, Section 11511(a), added § 43, effective for costs paid or incurred in tax years beginning after 12/31/90.
Does the provision sunset or expire? If so, when?
This credit is currently phased out due to the price of crude oil exceeding $28 (in 1990 dollars) by more than $6.
The enhanced oil recovery credit is one of the credits under the general business credit under § 38. Section 43 provides a credit equal to 15 percent of the taxpayer's qualified enhanced oil recovery costs (defined below) for the taxable year. The credit is adjusted for inflation and fluctuations in the price of crude oil. It is phased out as crude prices increase above $28 (in 1990 dollars): when crude prices exceed $34 (in 1990 dollars) by $6, the credit is eliminated.
Seems EVEP's current MLP unit price undervalues the assets. All of the traders have been waiting for a Utica transaction, hasn't happened and now they are bailing out. The current dist of $3.08 should sell for an 8% yield, around $38, current price is $42+. That puts a value of around $4k per acre for the 100k acres of Utica they are trying to sell, not an unreasonable price, maybe even low. Not sure why it hasn't sold, CHK could be hurting the sale prices for e and p. On top of that, they have an over riding royalty interest on 880k acres of Utica potential that they retain, one analyst put that cash flow plus their midstream at almost $3 per unit in a few years, at 8%, $38 of additional value. $80 value vs $42 price. Will take a few years to grow into the value but you get a 6.5% yield while you wait. My kind of e and p investment. Seems the Utica is for real, Gulfport continues to appreciate.