1. (a) "High-cost gas" means natural gas that is:

   1. (1) Produced from any gas well completed within a shale formation, including but not limited to, the Fayetteville Shale, the Woodford Shale, the Moorefield Shale, and the Chattanooga Shale formations or their stratigraphic equivalents as described in published stratigraphic nomenclature recognized by the Arkansas Geological Survey;
   2. (2) Produced from any gas well in which the production is from a completion that is located at a depth of more than twelve thousand five hundred feet (12,500’) below the surface of the earth, where the term "depth" means the length of the maximum continuous drilling string of drill pipe used between the drill bit face and the drilling rig's kelly bushing;
   3. (3) Produced from a tight gas formation;
   4. (4) Produced from geopressured brine; or
   5. (5) Occluded natural gas produced from coal seams.

2. (b) Types of marginal gas.

   1. (1) "Marginal conventional well gas" means all natural gas produced from a conventional gas well beginning on the date the conventional gas well is incapable of producing more than two hundred fifty thousand cubic feet (250 Mcf) per day, as determined by the Director of the Oil and Gas Commission using the current wellhead deliverability rate methodology utilized by the Oil and Gas Commission, during the calendar month for which the severance tax report is filed.
   2. (2) "Marginal high-cost well gas" means all natural gas produced from a high-cost gas well beginning on the date the high-cost gas well is incapable of producing more than one hundred thousand cubic feet (100 Mcf) per day, as determined by the director using the current wellhead deliverability rate methodology utilized by the commission, during the calendar month for which the severance tax report is filed.
   3. (3) The term "marginal gas" shall include production from all zones and multilateral branches at a single well without regard to whether the production is separately metered.

   4. (4) "Marginal gas" shall not include gas produced from:

      1. (A) A high-cost gas well during the thirty-six-month period provided in 26 CAR § 167-106(c)(1);
      2. (B) A high-cost gas well during any allowed extension provided in 26 CAR § 167-106(c)(2); or
      3. (C) A new discovery gas well during the twenty-four-month period provided in 26 CAR § 167-106(b).

3. (c) "New discovery gas" means natural gas that is:

   1. (1) Produced from a new discovery gas well; and
   2. (2) Eligible for the twenty-four-month reduced severance tax rate provided in 26 CAR § 167-106(b).

Codification Notes: This section as promulgated prior to codification into the Code of Arkansas Rules provided as follows: "Source: Ark. Code Ann. § 26-58-101."