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Marginal Well Fee

In 1992, the Oklahoma Legislature passed Senate Bill 684, now Title 52 O.S. Section 700. The bill allowed a voluntary fee to be collected by the Oklahoma Tax Commission (OTC) from the revenue stream of oil and gas production with the proceeds underwriting the efforts of a new state agency. The Oklahoma Commission on Marginally Producing Oil and Gas Wells (MWC) was born.

The fee paid to fund the MWC's activities is based on the volume of oil and gas produced. As set out in the enabling legislation, the fee was two-tenths of one cent (.002) on each barrel of petroleum liquid and one-hundredths of one cent ($.0001) on each one thousand (1,000) cubic feet of natural gas, including casinghead gas produced from each well in the State of Oklahoma. Because the fee is based on volume, the resulting revenues have decreased steadily since 1992 due to the decline in oil and gas production, even though oil and gas prices have increased substantially during that time.

Senate Bill 136 was passed by the Senate and signed into law by the Governor Brad Henry, effective January 1, 2008 to increase the Marginal Well Commission's fee to $.00015 per mcf of gas and $.0035 per bbl of oil. 

The person remitting the gross production tax to the Oklahoma Tax Commission will be sending in the fee in the same manner, but with the new Form 316. The new form will be available on the OTC's website as well as by clicking on the link to the right. You can also submit your assessment electronically by clicking on the OERB/MWC link.

The deadline to apply for a refund of 2011 fees paid has expired.