Draft of the severance tax legislation

Here's a draft of the bill distributed to legislators this afternoon that would increase the severance tax as it pertains to natural gas. Several legislators have raised concerns over specifics of the bill, and most of these questions are answered in this initial draft, including the definition of a "high cost gas well" (taxed at the reduced rate of 1.5%) and the definition of a "marginal well" (taxed at the reduced rate of 1.25%).

Still at issue is the average life of a well. I understand that after 36 months, production of an average well drops off by 40-50%. The current proposal taxes production of new wells at 1.5% for the first 24 months of production. Answering this quesiton will help determine whether the proposed tax is closer to 1.5% or 5%.