The state Department of Natural Resources (DNR) will administer the Dry Hole Credit Well Program authorized by Act 298 of the 2005 Regular Legislative Session, and authored by state Sen. Reggie Dupre of Houma.

According to provisions of the Dry Hole Credit Well program, any new well drilled for purposes of developing and producing oil and gas resources which is spudded after July 1, 2005 and completed before June 30, 2009 can qualify as a royalty relief receiving well, provided the well is drilled after certification of a dry hole credit well and drilled on a state lease within the coastal zone.  The regulation also requires the well to be drilled at a depth below 19,999 feet.  The amount of the credit will be fifty percent of the cost of the dry hole.

Application for status as a Dry Hole Credit Well must be made with the DNR Office of Mineral Resources. As part of the certifying process, the office will require for verification various documents related to the well’s history.

The new program is considered an incentive to oil and gas producers that have plans to drill deep wells.  State officials expect the program will encourage oil and gas exploration in the coastal zone, within three-miles off the state’s coast.

For reviewing specifications and procedures involved in the program online, click here.