IRS Publication 535 was discontinued after the 2022 tax year; its content now lives in the IRS Guide to Business Expense Resources, the current hub for guidance on intangible drilling costs, depletion, and other oil and gas-related business deductions.
Reference Library
Resources
Useful References
Public sources for better oil and gas review
External resources for visitors reviewing oil and gas operations, tax topics, regulatory records, industry education, and due diligence questions.
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IRS Publications — Tax Treatment of Oil & Gas
The IRS publishes guidance on the tax treatment of oil and gas investments. These are official government publications and do not constitute tax advice from VP Operating.
Explains depreciation and cost recovery rules that apply to tangible drilling equipment and surface facilities.
The statutory authority for the IDC election, allowing qualifying working interest owners to expense intangible drilling costs in the year incurred.
Consult a tax professional for current interpretation and election requirements.
Governs the passive activity rules and includes the specific working interest exception that allows qualifying working interest owners to offset ordinary income.
Consult a tax attorney for analysis of how these rules apply to your specific situation.
IRS guidance on like-kind exchanges, including the post-2017 limitation to real property, like-kind real property concepts, and Form 8824 reporting.
The IRS form used to report like-kind exchanges, with instructions for replacement property, realized gain, recognized gain, and basis calculations.
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SEC — Public Education & Disclosure
The U.S. Securities and Exchange Commission provides public educational resources about fraud prevention, disclosures, and private offering rules.
The SEC's Investor.gov resource on investment fraud, including oil and gas scams, red flags, and questions to ask when reviewing private opportunities.
Rule 501 of Regulation D defines accredited investor standards, a common concept in private market discussions.
Public companies engaged in oil and gas exploration file financial statements and reserve reports with the SEC. EDGAR provides free access to these filings.
Research Categories
Regulatory, industry, and due diligence references
State Regulatory Agencies
Each oil-producing state has a regulatory agency that oversees drilling permits, production rules, and environmental compliance. These agencies publish public well data.
The primary regulator for oil and gas in Texas. Public well data, production records, permit information, and operator histories are searchable on the RRC website.
Regulates oil and gas in Oklahoma. Provides public access to well records, completion reports, and production data.
The regulatory authority for oil and gas in New Mexico, including the prolific Delaware Basin (Permian).
Industry Organizations & Education
Several industry organizations publish educational materials, standards, and data that are useful for understanding oil and gas operations and economics.
The primary professional organization for petroleum engineers. SPE publishes technical papers, the Petroleum Engineering Handbook, and reserve reporting standards.
The leading geoscience organization for the oil and gas industry. Publishes basin studies, play maps, and educational materials.
Represents independent oil and gas producers. Publishes industry data, tax policy analysis, and operational statistics relevant to domestic onshore producers.
The federal agency that publishes comprehensive data on oil and gas production, prices, reserves, and market conditions. An essential resource for commodity price context.
Due Diligence Checklists
The following are general frameworks for evaluating oil and gas operators and projects. These are educational in nature and do not guarantee outcomes.
Operator Due Diligence
Key areas to research: state regulatory records (violations, enforcement actions), historical AFE accuracy vs. actual costs, operator track record in the target basin, financial stability, and references from prior project stakeholders.
Check the Texas RRC, OCC, or relevant state agency for the operator's compliance history.
Project Due Diligence
Key documents to request and review: geological prospect package, title opinion, proposed operating agreement (JOA), AFE with line-item cost breakdown, independent reserve estimate (if available), and economic model with multiple price scenarios.
Engage a qualified petroleum engineer or landman for independent review of technical documents.
Legal & Tax Due Diligence
Confirm the structure of the arrangement and how any interest is held. Verify the operating agreement is industry-standard. Obtain written tax analysis from a CPA experienced in oil and gas before relying on anticipated tax treatment.
VP Operating recommends that visitors engage independent legal and tax counsel where appropriate.
Reference Only
External links are provided for reference only. VP Operating does not endorse, control, or take responsibility for third-party content. Links may change over time. This page does not constitute legal, tax, investment, or financial advice.