Pangea Exploration, LLC.

"O i l  &  N a t u r a l  G a s  D e v e l o p m e n t"




As oil and natural gas supplies are declining, global demand is on the rise. The  top  ten  oil-consuming

countries  alone  consume  over 50  million barrels of oil per day*. Even with  the  rising popularity of

alternative energy sources as a means to fuel our cars, oil cannot easily be replaced as it is used to

manufacture virtually everything we use on a daily basis, from clothing and pharmaceuticals to detergents and

insulation. There are thousands upon thousands of petroleum-based products that we rely on every day. All of

this translates into opportunity for savvy investors.



Through direct participation programs in oil and gas, investors actually own a portion of the well and receive a

share of the cash flow generated via monthly disbursements. In addition to the income potential, oil and gas

investments offer substantial tax benefits, which the U.S. government has designed to encourage domestic

drilling. Since the Tax Reform Act of 1986, direct participation programs in oil and gas are one of the few

remaining investments that allow investors to shelter income, making it one of the most tax advantaged

investments today. Investors may be able to deduct as much as 65 to 100 percent of their investment within

the first year, whether the well is successful or not, and 15 percent of your income is tax-free.


*Source: U.S. Energy Information Administration


Tax Considerations.


The Independent Producer


America’s determination to increase domestic reserves and be free of OPEC dependency has placed a


tremendous need for capital on oil and gas  companies.  The  burden  is  particularly  heavy  for  independent


producers whose funds are more limited than those of major oil and gas companies which fund their drilling


activities with the sale of stock. Most Independent Operators, which drill the majority of the Nation’s wells, are


able to provide investors with cash flow and tax advantages through direct participation in oil and gas              

programs, thus avoiding the major oil companies’ corporate overhead.



Oil and Gas Investing Tax Treatment


The Tax Reform Act (Act), enacted in 1986, made significant changes to the tax laws as they pertain to oil


and gas investments. The Act attempted, for the most part, to shift more of the tax burden from individuals to


corporations. The Act affected the ability of taxpayers to shelter income.



Intangible Developmental Costs


The Act allows Domestic Intangible Development costs to be expensed or capitalized at the discretion of the


taxpayer. Furthermore, intangible costs may be deducted by the taxpayer in the year the well is drilled.



Tangible Developmental Costs


Currently, the drilling of an oil and/or gas well is considered production of an asset. The tangible well costs are


capitalized and amortized over a seven (7) year period, beginning with the month in which they are paid.





Independent producers and royalty owners can claim percentage depletion of 15% on domestic production.


  Depletion costs may be recovered using whichever of two (2) methods provides a higher deduction, cost depletion


  or percentage depletion.


Percentage  depletion  for  oil  and  gas  properties  is  limited  to independent producers and royalty owners for  


  daily production up to 1,000 barrels of crude oil or an equivalent amount of natural gas. However, percentage


  depletion cannot exceed 65% of overall income.


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This Website contains information that is “forward-looking” in that it describes events and conditions which Pangea Exploration, LLC (“Pangea”) reasonably expects to occur in the future.  Expectations for the future performance of the business of Pangea are dependent upon a number of factors, and there can be no assurance that Pangea will achieve the results as contemplated herein and there can be no assurance that Pangea will be able to conduct its operations or production from its properties will continue as contemplated herein.  Certain statements contained in this website are forward-looking statements.  The accuracy of these statements cannot be guaranteed as they are subject to a variety of risks which are beyond the Company’s ability to predict or control and which may cause actual results to differ materially from the projections or estimates contained herein.  These risks include, but are not limited to: the possibility that the described operations (including any proposed exploration or development drilling) will not be completed on economic terms, if at all, or the estimates of reserves may not be accurate.  The exploration for, and development and production of, oil and gas are an enterprises attendant with high risk, including the risk of fluctuating prices for oil and natural gas, imports of petroleum products from other countries, the risks of not encountering adequate resources despite expending large sums of money, and the risk that test results and reserve estimates may not be accurate, notwithstanding appropriate precautions.