April 12, 2008
Saturday

(SitNews) - Alaska Department of Revenue Commissioner Patrick Galvin on Firday released the FY 2008 Spring Revenue Forecast. General Purpose Unrestricted Revenue (GPUR) for FY 2008 is projected to total $8.6 billion, a state record. Unrestricted oil revenues are expected to generate $7.8 billion in FY 2008 and $6.4 billion in FY 2009, representing 91% and 90% of GPUR, respectively. Alaska's new production tax is projected to bring in about $4.9 billion, or close to 58% of the revenue total. Total unrestricted oil revenues are forecasted to be almost $80 million higher than the preliminary Spring 2008 forecast. This forecast incorporates information from the annual production tax reports for 2007, filed April 1, 2008.

Also on April 1, the department received its first comprehensive reports from oil and gas explorers and developers on the North Slope. It appears that high oil prices and the additional incentives provided through the ACES legislation have encouraged oil and gas exploration and development, and a total of $250 million in capital credits were earned by these companies in FY 2008. The department anticipates continued exploration and development from these companies in FY 2009, and has projected credit totals of $400 million.

Revenue totals include payments made under the new ACES production tax plan signed into law by Governor Palin in December. Along with tax return information filed on April 1, oil and gas production companies remitted "true-up payments," which represent the difference between taxes paid under the previous production tax (PPT) and the tax owed under ACES for the period of July 1, 2007 through December 31, 2007. These true-up payments totaled $782 million.

Revenue officials project Alaska North Slope (ANS) crude oil prices on the West Coast to average $85.73 in FY 2008, representing a 39% increase from the FY 2007 level of $61.63 per barrel. The department projects ANS crude oil prices will decline to $83.04 per barrel in FY 2009.

North Slope production is forecast to average about 722,000 barrels per day in FY 2008, down 2.4% from FY 2007 production of 739,700 barrels per day. Production is forecast to decline another 4.6% in FY 2009 to 689,000 barrels per day.

Lease expenditures are projected to total $4.3 billion in FY 2008, 17% more than FY 2007 expenditures of $3.7 billion. In FY 2009, the department expects lease expenditures to increase to $4.7 billion, up about 9% over FY 2008 levels.

On the Web:

Download the Spring 2008 Forecast
www.tax.alaska.gov

Source of News:

Alaska Department of Revenue
www.revenue.state.ak.us

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