Tax Benefits

Ronald Reagan had the insight, along with his advisors, to see that sooner or later it would be imperative to our nations economy and our overall security to become energy independent. So, the Reagan administration put through tax law changes that gave the American tax payer an incentive to invest in domestic oil and gas exploration.  By allowing a full tax write off for “IDC’s” or Intangible Drilling Cost for first year new money invested with a drilling company and capturing the remaining tangible drilling cost over the next five years, the federal government was sending a loud message; invest in domestic U.S. oil & gas exploration. 


3 Ways to Make and Save Money with Southwestern Permian EP:

Before, During & After.



IDC drilling cost can be written off up to 80% in the first year.  Let’s say you invest $100,000 in Southwestern Permian.  If the IDC’s come back at 79.6% for the first year cost, you would be able to write off $79,600 against your taxable income as a General Partner.  If you are in a 35% marginal tax bracket you would see a real tax savings of $27,860, plus the remaining $20,400 would be written off over the next five years.  That’s real tax savings dollars back in your pocket.



When your wells start producing hydrocarbons that are piped to market and sold, your monthly distributions from the sell of oil & gas are only 85% taxable.  Meaning 15% of your income is tax free.  $850 of the $1,000 is reported as taxable income and $150 is income tax free.



Southwestern Permian EP has an exit strategy.  Our goal is to drill successful oil & gas wells and when a company like Southwestern does that, historically it attracts the attention of one of our much larger friendly competitors. For the right price or a multiple as is commonly referred to, Southwestern will sell this group of wells. 

Our goal is 2X or 3x of what we originally have in them.  That, in turn, would roll to you the investor.  If we were able to sell these wells for 2X, and you invested $100,000... you would receive $200,000, on top of the tax write offs, recapture of tax savings, cumulative monthly distribution checks over that time, and the exit sell.