It depends on your personal tax return situation to see which method would be most beneficial to you. You would need to run both scenarios to decide which is best. An AMT adjustment is required if costs are not amortized over 60 months.
As mentioned, Intangible Drilling Costs may be fully deducted as a business expense by electing to do so, or capitalized and recovered through depreciation or depletion. These costs are defined as costs related to drilling and necessary for the preparation of wells for production, but that have no salvageable value. These include costs for wages, fuel, supplies, repairs, survey work, and ground clearing. They compose roughly 60 to 80 percent of total drilling costs. Intangible drilling costs are 100% tax-deductible in the year incurred. It doesn't matter if the well produces or strikes oil; as long as it is operating by March 31 of the following year. the intangible costs are 100% deductible.
See additional information that might be helpful to you in the link below:
Intangible drilling costs
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