GOP's Tax Plan Increases Value of Intangible Drilling Costs Deductions to Accredited Investors

Share Article

Encore Energy, Inc. is confident that Trump's proposed tax plan should make the already existing intangible drilling cost even more important and valuable to high-income SEC defined accredited investors, resulting in an estimated 40 - 50% federal and state tax savings in the current year.

Encore Energy, Inc. announced today that the Company believes the GOP's proposed tax plan should strengthen the value of the intangible drilling cost deductions (IDC) and tax savings delivered to qualified SEC Accredited oil and gas investors.

How does this plan increase the value of the 100% IDC tax deduction?

1 - Trump has formally announced that the rate for the high-income will stay the same or possibly increase. This increases the value of IDC tax deduction.
2 - The proposed plan disallows the deduction of state taxes paid against federal income. This further increases the value of the IDC tax deduction because deductions can be taken against state and federal income. This makes the IDC tax deduction even more valuable, especially to partners in states that higher tax rates, at the state level.
3 - The proposed plan intends do away with the dreaded Alternative Minimum Tax (AMT). This makes the IDC more valuable and easier to compute for all qualified investors.
4 - This disallowance of mortgage interest deductions for larger mortgages and homes makes these IDC deductions potentially more important to high-income investors.

In come cases, nearly 40 - 50% of the investor's initial investment is subsidized by the US government while oil prices appear to be on the way up. Investors who participate in the month of December, can deduct nearly 95% of their investment against 2017 taxable income.

Encore Energy, Inc. is currently drilling multiple horizontal wells in the Berea play where more than 20% of the state's annual income is produced. The Berea is projected to produce and provide income for up to 15 - 20 years or more. Encore is a proven operator in the Berea play. Be sure to check out their “Investment Due Diligence Section” online at

Oil and gas investments involve a high degree of risk and are suitable for investors who can afford the loss of their entire investment. Encore Energy, Inc. does not provide tax advice, and prospective investors should seek advice from their tax advisor(s). The information herein is the opinion of Encore Energy, Inc. as it relates to the proposed tax plan.

For more information and to see if you qualify as an SEC defined accredited investor, please contact Joseph Hooper at (270) 842-1242, ext. 224 or by e-mail at Joseph.Hooper(at)encore-energy(dot)com

Assumptions, Disclaimer and Cautionary Statement: The information herein may contain forward-looking statements, and actual results may vary. Words such as "estimate", "will," "intend," "continue," "target," "expect," "achieve," "strategy," "future," "may," "goal," or other comparable words or phrases or the negative of those words, and other words of similar meaning indicate forward-looking statements and important factors which could affect actual results. Forward-looking statements are made based upon Management's current expectations and beliefs concerning future developments and their potential effects upon Encore Energy, Inc. Oil and gas investments involve a high degree of risk, uncertainty and are only suitable for qualified Accredited (SEC Definition) investors who are sophisticated in making business decisions and can bear the financial loss of their entire investment, while at the same time delivering a turnkey profit to the Company for providing the prospect development, lease acquisition, drilling, completion, engineering and ongoing production operations. The Company does not provide tax advice and investors should seek the advice of their tax professional. Any tax and/or other information herein is provided for illustration purposes only and may include estimates that are uncertain and subject to change. It is impossible to accurately forecast profitability, production, reserves, income, expenses and timelines for any project. No assurances can be made as it relates to reserves, production, income, profit, prices, timelines and/or other estimates. Actual production and results are beyond the control of management and the proposed well operations, planning and other project information are subject to change at all times. In the event that commercial production is achieved by the partnership, it may take many years for the investor to recoup his or her investment. The Company's lease acreage position under is subject to change and includes acreage under lease, Farmout agreement, verbal agreement, renewals, expired terms and any other prospective acreage in which the Company has communicated and/or negotiated with the landowner the leasing of oil and gas rights, now or in the future, and the lease / mineral owner has leased or communicated their intent to lease there mineral lease rights to the Company. It is important for qualified investors to acknowledge the fact that the US government provides them with tax savings (100% IDC tax deduction) to mitigate or at least off-set some of the financial risk associated with domestic oil and gas investments. This is not an offer to sell or buy a security. An offer shall only be made pursuant to SEC Regulation D, Rule 506(c) by a private placement offering memorandum, which is further governed by the National Investment Securities Marketing Improvement Act of 1996.    This is not a private placement offering memorandum.

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Steve Stengell
Encore Energy, Inc.
+1 (270) 438-9956
Email >
Visit website