Cannon Operating/ red co. sell you dreams ,return you nightmares garland, Texas
this company is a huge scam...they sell you hype and return excuses as revenue ! every project they sell is the next best thing , yet the always fail to produce any kind of production. a fly by night co. that has changed their name 3 time in the last 3 years ..what honest and legit company does that? they might look like they know what they are doing , but dont be fooled! their compliance officer isnt certified in any way and has a long criminal back ground as does the owner ! this isnt a company you should waist your time with! Run the other way !
Cannon operating calls on investors and scams them by telling them to invest in oil and natural gas drilling. They claim to have land that produces oil. But none of it is true. They will use one of their friend as another investor and tell them to speak all good about the company. They don't even screen if the investor is accredited. This is against the Texas railroad commission' rule. They cannot get non accredited investor to invest in this kind of investment. They will have to pay for this.
Direct participation in oil and gas can generate several tax benefits. These benefits range from large up front deductions for intangible drilling costs (IDC), to tax credits for the development of certain types of tight formations. Deductions are generated mainly from the cost of non-salvageable equipment or services conducted during the drilling phase, testing, and/or completion of the well. The following is a synopsis of the tax benefits generated by direct participation oil and gas ventures.
Intangible Drilling Costs (IDC): When an oil or gas well is drilled, several expenses may be deducted immediately. These expenses are deductible because they offer no salvage value whether or not the well is subsequently declared to be dry. Examples of these types of expenses would be survey work, ground clearing, drainage, wages, fuel, repairs, supplies, etc. IDCs usually represent 60 to 80% of the well cost. Participants usually put up the drilling portion of their investment before drilling operations commence, and the participant’s portion of the intangible drilling costs is generally taken as a deduction in the tax year in which the intangible costs occurred. The accounting method adopted however could affect the deduction period.
Intangible Completion Costs: As with IDCs these costs are generally related to non-salvageable completion costs, such as labor, completion materials, completion rig time, fluids etc. Intangible completion costs are also generally deductible in the year they occur, and usually amount to about 15% of the total.
Depreciation: As opposed to services and materials that offer no salvage value, equipment used in the completion and production of a well is generally salvageable. Items such as these are usually depreciated over a seven-year period, utilizing the Modified Accelerated Cost Recovery system or MACRS. Equipment in this category would include casing, tanks, wellhead and tree, pumping units, etc. Equipment and tangible completion expenses generally account for 15 to 30% of the total well cost.
Depletion Allowance: Once a well is in production, participants in the well are allowed to shelter some of the gross income derived from the sale of the oil and/or gas through a depletion deduction. Two types of depletion are available, cost and statutory (also referred to as percentage depletion). Cost depletion is calculated based upon the relationship between current production as a percentage of total recoverable reserves. Statutory or percentage depletion is subject to several qualifications and limitations. This deduction will generally shelter 15 percent of the well’s annual production from income tax. For “stripper wells” (wells producing 15 barrels/day or less), the depletion percentage can be up to 20%.
Tax Credits: Congress has enacted several tax credits in relation to oil or natural gas production. The enhanced oil recovery credit is applied to certain project costs incurred to enhance a well’s oil or natural gas production. This credit is up to 15% of the costs incurred to enhance production. The non-conventional source fuel credit provides for a $3 per barrel of oil equivalent credit for production from the so-called qualified fuels. Qualified fuels include oil shale, tight formation gas, and certain synthetic fuels produced from coal.
The tax benefits generated by a direct participation in oil and gas projects are substantial. The immediate deduction of the intangible drilling costs can greatly offset the initial investment. Through the up-front deductions, the government effectively subsidizes the risk capital by reducing the participant's federal and possibly state income tax. Every participant should always consult with his or her tax advisor.
This section provided by Cannon Operating is intended strictly for marketing and informational purposes only and is not tax or financial advice. This section is intended to provide information to partners or joint venturers who participate with Cannon Operating in oil and gas drilling and development projects so they may have the right questions to ask their own legal and financial advisor. Readers or interested parties should always consult their respective financial advisors and tax accountants for legal and/or tax advice as it pertains to their particular circumstances.
Cannon Operating Company LLC Reviews
Cannon Operating/ red co. sell you dreams ,return you nightmares garland, Texas
this company is a huge scam...they sell you hype and return excuses as revenue ! every project they sell is the next best thing , yet the always fail to produce any kind of production. a fly by night co. that has changed their name 3 time in the last 3 years ..what honest and legit company does that? they might look like they know what they are doing , but dont be fooled! their compliance officer isnt certified in any way and has a long criminal back ground as does the owner ! this isnt a company you should waist your time with! Run the other way !
Cannon operating calls on investors and scams them by telling them to invest in oil and natural gas drilling. They claim to have land that produces oil. But none of it is true. They will use one of their friend as another investor and tell them to speak all good about the company. They don't even screen if the investor is accredited. This is against the Texas railroad commission' rule. They cannot get non accredited investor to invest in this kind of investment. They will have to pay for this.
Direct participation in oil and gas can generate several tax benefits. These benefits range from large up front deductions for intangible drilling costs (IDC), to tax credits for the development of certain types of tight formations. Deductions are generated mainly from the cost of non-salvageable equipment or services conducted during the drilling phase, testing, and/or completion of the well. The following is a synopsis of the tax benefits generated by direct participation oil and gas ventures.
Intangible Drilling Costs (IDC): When an oil or gas well is drilled, several expenses may be deducted immediately. These expenses are deductible because they offer no salvage value whether or not the well is subsequently declared to be dry. Examples of these types of expenses would be survey work, ground clearing, drainage, wages, fuel, repairs, supplies, etc. IDCs usually represent 60 to 80% of the well cost. Participants usually put up the drilling portion of their investment before drilling operations commence, and the participant’s portion of the intangible drilling costs is generally taken as a deduction in the tax year in which the intangible costs occurred. The accounting method adopted however could affect the deduction period.
Intangible Completion Costs: As with IDCs these costs are generally related to non-salvageable completion costs, such as labor, completion materials, completion rig time, fluids etc. Intangible completion costs are also generally deductible in the year they occur, and usually amount to about 15% of the total.
Depreciation: As opposed to services and materials that offer no salvage value, equipment used in the completion and production of a well is generally salvageable. Items such as these are usually depreciated over a seven-year period, utilizing the Modified Accelerated Cost Recovery system or MACRS. Equipment in this category would include casing, tanks, wellhead and tree, pumping units, etc. Equipment and tangible completion expenses generally account for 15 to 30% of the total well cost.
Depletion Allowance: Once a well is in production, participants in the well are allowed to shelter some of the gross income derived from the sale of the oil and/or gas through a depletion deduction. Two types of depletion are available, cost and statutory (also referred to as percentage depletion). Cost depletion is calculated based upon the relationship between current production as a percentage of total recoverable reserves. Statutory or percentage depletion is subject to several qualifications and limitations. This deduction will generally shelter 15 percent of the well’s annual production from income tax. For “stripper wells” (wells producing 15 barrels/day or less), the depletion percentage can be up to 20%.
Tax Credits: Congress has enacted several tax credits in relation to oil or natural gas production. The enhanced oil recovery credit is applied to certain project costs incurred to enhance a well’s oil or natural gas production. This credit is up to 15% of the costs incurred to enhance production. The non-conventional source fuel credit provides for a $3 per barrel of oil equivalent credit for production from the so-called qualified fuels. Qualified fuels include oil shale, tight formation gas, and certain synthetic fuels produced from coal.
The tax benefits generated by a direct participation in oil and gas projects are substantial. The immediate deduction of the intangible drilling costs can greatly offset the initial investment. Through the up-front deductions, the government effectively subsidizes the risk capital by reducing the participant's federal and possibly state income tax. Every participant should always consult with his or her tax advisor.
This section provided by Cannon Operating is intended strictly for marketing and informational purposes only and is not tax or financial advice. This section is intended to provide information to partners or joint venturers who participate with Cannon Operating in oil and gas drilling and development projects so they may have the right questions to ask their own legal and financial advisor. Readers or interested parties should always consult their respective financial advisors and tax accountants for legal and/or tax advice as it pertains to their particular circumstances.