AK SB177

Creates tax credits against oil and gas production tax for the first three unaffiliated persons drilling offshore exploration wells in Cook Inlet's pre-Tertiary zone using jack-up rigs, with credits of 100%, 90%, and 80% of exploration expenditures respectively (capped at $25 million, $22.5 million, and $20 million).

Requires wells to penetrate and fully evaluate a pre-Tertiary prospect and changes the completion criteria from the original "drill bit first turns to the right against seafloor" language to "completed into the pre-Tertiary zone."

Limits eligible exploration costs to work performed after March 31, 2010, and allows costs for modifying existing jack-up rigs but excludes costs for constructing or manufacturing new rigs.

Requires repayment of 50% of the credit received in equal monthly installments over 10 years if the exploration well results in sustained production from a newly discovered pre-Tertiary zone reservoir, commencing 60 days after production begins.

Adds requirement that the Alaska Oil and Gas Conservation Commission and commissioner of natural resources jointly determine whether wells met the geological and industry practice standards, and prevents taxpayers from claiming duplicate credits for the same exploration expenditure.