Alaska State Legislature
News from the House Majority

Jerry Ritter, House Majority Press Secretary
State Capitol
Juneau, AK 99801
Phone: (907) 465-3804
web site: http://www.akrepublicans.org
Actuality line: 1-800-478-6540

House Bill Encourages Rapid Development of Reserves

Measure Reduces Royalties on Cook Inlet Oil and Gas

For Immediate Release April 7, 1998 Contact: Rep. Mark Hodgins at (907) 465-2283.

Juneau – The Alaska House of Representatives Monday passed House Bill 380, which is intended stimulate the development of old oil & gas reserves in the Cook Inlet region. The vote was 26-11.

"Hopefully, this bill will encourage the development of several old oil & gas fields in Cook Inlet," said Representative Mark Hodgins (R-Kenai), the bill’s sponsor. "In addition to stimulating production from these old fields, House Bill 380 has the potential to leverage additional exploration and development in the vicinity of the new infrastructure."

All of the oil & gas fields that qualify under House Bill 380 were discovered more than 30 years ago and have remained undeveloped due to poor economics. House Bill 380 provides incentive for oil companies to develop these old fields as rapidly as possible, consistent with safety and environmental standards. The legislation says lessees would pay a reduced royalty rate of 5 percent, for a period of ten years, providing the field is brought into production before January 1, 2004.

"By encouraging the rapid development of now-uneconomic oil and gas fields, House Bill 380 will benefit the state and local economies through taxation and royalties," Hodgins said. "The bill will also encourage future development of new oil and gas discoveries by lowering the costs of industry infrastructure. But, even more than that, it takes care of Job #1 - providing jobs for Alaskans," Hodgins said.

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Broadcasters note: Comments are available by calling the House Majority Actuality Line at (800) 478-6540.
= Mark Hodgins, 54 K