In early November, the Texas Federal Tax Institute will host the TexFed: Oil & Gas Tax Conference in New York City. This is the first time a conference of this nature will be held in the Big Apple, and I am honored to participate as a member of a panel that will explore farmout transactions, joint operating agreements and the use of tax partnerships to optimize the after-tax economics of these transactions.
With the re-emergence of the domestic oil and gas exploration and production business, oil and gas farmout transactions have returned to prominence as a means by which a party with an oil and gas property can join together with a party who has an interest in deploying its capital to exploit that property. Our panel will define, analyze and discuss customary domestic farmout transactions and the resulting tax consequences thereof, including when to elect to be excluded from the partnership tax rules and alternatively when to use the partnership tax rules to avoid traps for the unwary and achieve tax efficiencies for the farmout transaction. In particular, we’ll analyze and discuss the innovative “cash and carry” transaction, which, when properly implemented, can result in tax efficiencies for both the farmor and the farmee in the transaction.
The conference targets attorneys, accountants and corporate finance personnel with an interest in understanding how these transactions are implemented to meet the objective of the parties. The conference will cover a broad range of issues including the tax rules for oil and gas operations, master limited partnerships, financing oil and gas activities through volumetric production payments, investments by tax-exempt investors and application of the at-risk and passive loss rules. In short, the conference is a comprehensive overview of current issues that industry tax, corporate finance, merger and acquisition, accounting and legal personnel need to understand. There also will be networking events which offer the attendees the opportunity to meet new people and make new connections in the industry.
I’m looking forward to seeing many of my friends and contacts in New York next month, and I hope you’ll consider joining us at the conference as well. Visit the Texas Federal Tax Institute’s website to register.