Arnco Oil & Gas is a small independent oil and gas company in Cookeville, Tennessee. We specialize in drilling, producing, and operating oil and gas well in Tennessee and surrounding areas. Arnco has been doing business in Tennessee for the past 51 years and takes a "hands-on" approach to the day to day operations of all aspects of the company. This helps Arnco keep partner cost low which translate into more profit for our partners. Arnco is striving to become a leader in the oil and gas industry.
If you have questions or are interested in becoming one of our investment partners, call us at 931-526-7655 or u can email us at email@example.com
Arnco has aquired several leases in Overton County, Tennessee. One of these leases is a 330 acre lease with several drilled wells. Arnco is currently working with partners to examine and drill more wells on this lease due to one of the previous drilled wells coming in at a flow rate of 65 bbls an hour. Any new wells will be drilled to an approximate depth of 1850 feet.
Another Arnco lease in Overton County, Tennessee is a 200 acre lease with several drilled wells. Arnco is working with partners to examine and drill additional wells at this lease also. New wells will also be drilled to an approximate depth of 1850 feet.
Arnco has another 200 acre lease in Overton County, Tennessee with several drilled wells. It is also being examined for future drilling of additional wells. One well on this lease had initial production of 100 bbls a day.
Arnco has a 150 acre lease in Overton County, Tennessee that is being examined for future drilling.
In 1979, Arnco drilled a well on the Doc Billings Lease that comprised of 1400 acres in Overton County, Tennessee, This well came in with an initial flow rate of 60 bbls an hour. It produced for over 10 years and made more than $10,500,000.00 in oil revenues.
In 2000, Arnco drilled a well on the Union Bank Lease in Overton County, Tennessee. The first well drilled had an initial production of 60 bbls per hour. The second well drilled had a initial flow rate of 45 bbls per hour. The third well has an initial flow rate of 52 bbls per hour.
In 2013, Arnco drilled a well on the Bacco Lease in Overton County, Tennessee. It came in with an initial flow rate of 60 bbls a day. Arnco drilled an additional well in 2015 and it initially produced 65 bbl a day.
In 1995, Arnco drilled for gas in Fentress County, Tennessee. Arnco drilled 21 wells in this area. These wells are approximately 500 feet deep. Arnco laid a 10 mile 4'' gas line to connect with an existing transportation line.
In 2005, Arnco drilled 8 gas wells in Sunbright, Tennessee. After drilling these wells, Arnco and there partners laid an 8'' 15 mile gas line to Spectra Natural Gas Company. In 2008, CNX Gas purchased Arnco's gas line.
For exploratory wells when monies are at risk and not passive for IRS purposes, depending on the financial situation of the investor, the IDC ( Intangible Drilling Cost ) may be expensed. The TDC ( Tangible Drilling Cost ) may be capitalized.
As a rule of thumb, about 75%-95% (give or take 10%) of the total cost for drilling, completing, and equipping the well falls under the IDC and may be deductible the year expensed. The 25% (give or take 10%) of the total cost of the well falls under TDC and may be depreciated over seven years.
It is advised that each individual investor has their own advisor concerning these matters as it relates to their personal situation. For tax filing purposes, the oil and gas company offering the prospect will provide the investor with a statement showing how much money invested went for IDC and how much went for TDC.
By electing at risk and not passive participation, intangible drilling and development cost may be deducted as an expense for federal income tax purposes. The prepayment of intangible drilling cost is generally allowed if drilling occurs within 90 days after the close of the taxable year in which payments are made.
INTANGIBLE DRILLING COST
IDC is defined as any expenditure that in itself does not have a salvage value and is “incident to and necessary for the drilling of wells for the production of oil and gas” U.S. Treas. Reg. Section 1.612-4(a).
¨ Agreements and negotiations in obtaining an operator for the well
¨ Agreements and negotiations with drilling contractors for the bids and drilling
¨ Survey and seismic work for locating a well site
¨ Construction or a road to a drill site
¨ Dirt work on location such as cellar, pits and drilling of the well
¨ Water, fuel, and other items necessary for drilling
¨ Logging , Acidizing
¨ Rental equipment for oil storage during testing
¨ Cost of removing rig from location, trucking, dozers and labor
¨ Dirt work for clean up
¨ Cementing and installing casing
TANGIBLE DRILLING COST
TDC is defined as lease and well equipment that is installed or constructed in connection with drilling, completing, and production.
¨ Surface casing even though unsalvageable
¨ Production casing even though most of it is unsalvageable
¨ Transportation of casing and tubing from manufacturer to supply point
¨ Wellhead (Christmas tree)
¨ Pump jack, treaters, and separators
¨ Recycling equipment, including necessary flow lines
¨ Storage tanks
The owner of an oil or gas well interest is generally entitled to a deduction for depletion with respect to the income received from the production of oil and gas. This allowance has changed several times through the years, but at the present it is 15%.
Investments in a working interest unit of a drilling or acquisition oil or gas well have certain risk factors that investors must understand. Investors should have a professional advisor to review and evaluate the economic, tax, and other benefits / consequences of ownership of a working interest unit and are not to construe the contents of this web site, or any other information furnished by Arnco Oil & Gas as investment, legal, or tax advice.
Drilling for oil and gas involves a risk of partial or complete loss of investment and could result in non-profitable attempts through dry holes as well as completed wells that do not produce sufficient amounts to return a profit on the amount invested. Therefore, only risk monies should be invested.
In the public interest and for the protection of the investors, any kind of offer to sell or solicit an offer to purchase oil or gas interest over the internet on a private funded basis is not allowed. Before considering any kind of investment in oil or gas, investors should be acquainted with the company making the offer.
There are risk factors and no guarantees in the oil and gas business, but for the few who like pioneering and purchasing interest in current producing properties and qualify, oil and gas can be highly profitable.
The above statements are warnings to anyone thinking about investing in the oil and gas industry.
Arnco Oil & Gas suggest that you call and discuss your interest in oil and gas and use tax dollars only.