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Severance Tax Relief Program

The Severance Tax Relief Program (STRP) allows the suspension or reduction of severance taxes due on production from a qualifying well for a variable time period depending on the category. To review the origin and history of the STRP, please follow this link to our Archives page.

In addition to the incentives below, the Louisiana Department of Revenue also manages other severance tax certifications. Please visit the Department of Revenue website, select "Forms," "Businesses," then "Severance Tax." Information regarding the Department of Revenue's programs are included in the instructions of the downloadable forms.

The Office of Conservation currently certifies applications under this program in three (3) categories:

  1. Deep Well - DW
  2. Horizontal Well - HW
  3. Orphan Well Rework - OR

Applications received on or after August 1, 2015 will be charged a $504 fee. The fee will be for each qualifying period of the wellbore, not per application. Please follow this link for more information regarding fee and rule changes.


Note: Wells sidetracked below 15,000 feet TVD from which production commenced after July 31, 1994 in the sidetrack hole are also eligible; however, the only costs allowed are those associated with the sidetrack. Re-entries of p&a wellbores qualify if the well is drilled deeper than the original or sidetracked below 15,000 feet TVD.

**Eligible for a two-year exemption from the date of commercial production or until payout of qualified costs, whichever comes first. Act 431 of 2023 Legislative Session clarifies that first production should be commercial production date, which could be after initial completion date.



Note: Horizontal recompletions are defined as horizontal drilling in an existing well bore. Horizontal recompletion costs are limited to only those costs associated with the horizontal portion of the well bore. Extensions of existing horizontal well bores in the same sand are not considered horizontal recompletions.

**Eligible for a two-year reduction in severance taxes from the date of first production or until payout of qualified costs, whichever comes first. In 2015, the full tax exemption was replaced with a tier system relative to the price of oil and gas. See summary here. The first reduced period is in effect July 1, 2022 through June 1, 2023 as reported in the Louisiana Department of Revenue's July 18, 2022 Revenue Information Bulletin No. 22-014.



  • Form STRP-OR - pending - submit letter request

See the guidance memorandum for information regarding the Orphan Well rework incentive per Act 391 of the 2021 Legislative Session.

**Eligible for a three-month severance tax exemption following a qualifying workover of a formerly orphaned well.



A well cost statement must accompany every STRP application for Deep Well and Horizontal Well categories. This cost statement includes a detailed itemized listing of the actual costs to drill, complete, and equip the well for production. No AFE or estimated costs are allowed. Applicants are encouraged to hold the filing of applications until they have a firm cost figure. Applicants are allowed to collect, retroactively, any severance taxes paid back to the date of first production on a qualifying well.

Costs such as building a board road, preparing the location, logging, cement, drill bits, pipe, labor, 3-D seismic*, etc. can be included on the cost statement. The cost to build a flowline to a facility and any new equipment needed to hook the well up to the facility can also be included; however, the cost of an existing facility is not eligible and a newly constructed facility's cost must be prorated to the number of wells it is designed to serve. Lease-related costs, legal fees, hearing costs, saltwater disposal wells, title searches, etc. are examples of costs that are not allowed on the cost statement.

*The 3-D seismic cost requested on Form STRP-3D must be included in the cost statement as a line item and included in the total cost shown on forms STRP-DW (Deep Well) and STRP-HW (Horizontal Well).

Applications claiming 3-D seismic costs must include Form STRP 3-D and a map depicting the footprint of the seismic area showing the wells that benifited from the seismic.

Any questions regarding any STRP should be directed to the Permit and Reservoir Section Manager.