Oil and Gas FAQ

1. Who is required to register for and pay the oil and gas production fee?
Producers of oil and gas. A producer is an owner of a well capable of producing oil and/or gas. 

2. Who is an owner?
An owner is defined in C.R.S. 34-60-103 (32) and is a person with the rights to drill into and produce from a pool and to appropriate the oil or gas from a well in Colorado. 

3. Who is required to register and pay when there is more than one owner of a well?
When there is more than one owner of a well, the Department will generally regard the person who exercises the right to control the conduct of oil and gas operations (i.e., the operator) as the person liable for the Oil and Gas Production Fee.

4. Are producers allowed to file a consolidated oil and gas production fee return with affiliated businesses?
Each producer must report the production for their own well(s).

5. Is the first purchaser of the oil and gas produced allowed to report and pay the fee on the producer’s behalf?
No, the Oil and Gas Production Fee is imposed upon the producer.  The producer must report the volumes produced and pay the resulting Oil and Gas Production Fee.

6. Are producers required to report production on a well-by-well basis?
No, the quarterly Oil and Gas Production Fee return requires the total statewide volumes of oil and gas produced by the producer for the previous calendar quarter. Producers must maintain complete and accurate records necessary to determine the correct amount of the Oil and Gas Production Fee in case of an audit by the Department.

7. Is the fee imposed upon oil and gas used by the producer?
No, the Oil and Gas Production Fee is imposed upon all oil and gas produced by the producer in Colorado, including production from domestic wells for home consumption. Liability for the fee is not limited to the production of oil and gas for sale. 

8. Is the production from low-volume wells (also known as “stripper wells”) exempt from the Oil and Gas Production Fee?
No, there is no exemption from the Oil and Gas Production Fee for oil and gas from stripper wells.

9. How should a producer report an adjustment made to the production volume after the  Oil and Gas Production Fee return is filed?
Changes in the reported production volumes must be made by filing an amended Oil and Gas Production Fee return through Revenue Online. Penalties and interest will apply to any additional fees paid after the due date of the return. Overpayments will be refunded with interest, subject to any offsets required by section 39-21-108(3), C.R.S.

10. Does the Oil and Gas Production Fee apply to the production of helium and carbon dioxide?
No, the fee does not apply to the production of carbon dioxide or helium.