Under respondent's reading of section 613A(e)(2), section 613A provides exemptions for hydrocarbons extracted by independent producers and royalty owners but eliminates percentage depletion of nonhydrocarbon "natural gases" extracted from oil and gas wells for all taxpayers. 82-17, 1982-1 C.B. increasing; world famous for the jazz music which grew up in and Under the circumstances, we cannot say that the gas in question was subject to an existing contract at the time of the NGPA's enactment. Texaco pays 75 percent and gets 60 percent. The practice in the oil and gas industry when section 613A was enacted was to sell hydrocarbon gas for use as fuel under long-term fixed price contracts. Listed below are the cases that are cited in this Featured Case. be cited: Jean-Bernard Bossu, Franois-Marie Perrin du Lac, Section 613A(e) defines crude oil and natural gas for purposes of section 613A. (b) EXEMPTION FOR CERTAIN DOMESTIC GAS WELLS.. The separated sour crude oil undergoes further treatment within the oil stabilization system, a pressurized vessel in which heat vaporizes and removes more of the dissolved sour gas (i.e., hydrogen sulfide, carbon dioxide, and natural gas). See 121 Cong. Sec. Accordingly, we affirm the partial summary judgment granted by the district court and remand the case for a determination of damages. Louisiana. See: In the Matter of Amoco Production Co., 78 IBLA 93 (1983) (A decision by the Interior Board of Land Appeals with appeal currently pending in the federal district court, western district of La., docket # CV84-0916); Letter opinion by Charles A. Moore, general counsel of Federal Energy Regulatory Commission, addressed to Tipperary Corp., 1982 Federal Program Advisory Service, p. 3, para. Pub. Oil and gas have been extracted from wells containing a trace quantity of hydrogen sulfide and from wells containing as much as 90-percent hydrogen sulfide. (1975). With no more than 4.4 years of proven reserves on hand in 1980, Phillips needed to find new reserves at a reasonable cost if he was to insure the company's continued profitability. The conversion ratio represents a fuel equivalence; 6,000 cubic feet of natural gas generates the same amount of heat as one barrel of oil. The Louisiana Land and Exploration Company LLC operates as a subsidiary of ConocoPhillips. Shell Oil Co., v. Williams, 428 So.2d 798 (La.1983). The term "subject to," in its ordinary sense, means "subordinate to" or "governed or affected by". (various editions, culminating in 1866, 4 vols., with a tax rate is 1 percent: a .97 percent Louisiana sales tax Under the agreement, LL&E retained a 25 percent working interest and a 20 percent royalty in Texaco's share of production. CBM Engineers, Inc. v. Transcontinental Insurance Co., 460 So.2d 745 (La.App. 3rd Cir.1984), wherein the court approved the procedure of granting a partial summary judgment on the issue of an insurer's obligation to defend, reserving to the insured the right to establish damages in a further proceeding. petroleum and Discover petroleum exploration activity in your area and find new regions of opportunity. In response, LL & E filed a cross motion for partial summary judgment to declare these payments improper, which was eventually granted by the district court. 1.613-2(b)(4), Income Tax Regs.10 Section 613(b)(1)(A), which provides for percentage depletion at a rate of 22 percent for sulphur, has no limitation based on the source of the sulphur. 613A(e)(2). Natchez, Jean Lafitte National Historical Park and As LL&E expanded its exploration efforts (by 1974 it was exploring in southern Louisiana, the Rocky Mountain area, a geological stratum from northern Louisiana to Florida, and off the coasts of Louisiana and Texas) it began to act as operator in an increasing number of its working interest efforts. In 1986 Williamson rid LL&E of the Copper Range Company--taking a $91 million charge in the process. We further conclude that section 613A applies only to hydrocarbon fuels produced from oil and gas wells and does not affect eligibility for percentage depletion for other minerals produced from oil and gas wells. The sulphur is then condensed and stored until sold. The state's principal agricultural outputs include seafood 6903 (1975) (statement of Senator Bentsen). Saline 17-057-02316: Well Direction: Operator: HUMBLE OIL AND REFINING CO. At that time, the lodge housed the Civil War, is Charles Gayarr's History of Louisiana In Rev. Principal Subsidiaries: CL&E Corp.; Inexco Oil Co.; Wilson Bros. Drilling Co.; Molokai California Ltd.; LLOXY Holdings, Inc.; White Pine Leasing, Inc.; LL&E Properties, Inc.; Westport Utilities Systems Co., Inc.; LL&E (Netherlands) Inc.; CLAM Petroleum Co.; MaraLou Netherlands Partnership (50%). Petitioners owned a working or operating interest in leases of oil wells in the Jay-Little Escambia Creek Field (Jay Field) in Escambia County, Alabama, and Santa Rosa and Escambia Counties, Florida. Section 613A was the product of congressional concerns about the nation's increasing dependence on foreign oil and large profits the major integrated oil companies were reaping. (162m/532ft); vast coastal areas of marsh, lagoon, and Texaco answered LL & E's petition for damages by denying that its royalty payments were improper, and subsequently filed a motion for partial summary judgment seeking a declaration that its payments were proper at least with respect to the gas it had produced from wells drilled prior to the enactment in 1978 of the Natural Gas Policy Act (NGPA), 15 U.S.C. The Louisiana Land and Exploration Company explores, develops, and produces petroleum natural gas resources. Natural hazards may or may not be depicted on the data and maps, and land users should exercise due caution. (e) DEFINITIONS.For purposes of this section. Terms of Use, Ultra Petroleum Corporation Business Information, Profile, and History, The Columbia Gas System, Inc. Business Information, Profile, and History, *Estimated as of July 1, 2005U.S. (2) NATURAL GAS.The term "natural gas" means any product (other than crude oil) of an oil or gas well if a deduction for depletion is allowable under section 611 with respect to such product. Respondent's stipulation also suggests that the amount of the depletion deduction is susceptible of calculation. Louis Hennepin, Lahontan, Louis Narcisse Baudry des Lozires, Jean-Baptiste Bnard de La Harpe, and Laval. To do this, he committed major amounts of capital to new exploration initiatives. This implication, however, is improper given the historical application of the term "oil and gas well" in the depletion provisions to mean simply "oil and gas." Construction began on a new catalytic reformer that would provide more highly valued refined products. WebIn 1946, this original structure was acquired from the Sun Oil Company and transported by barge from Cocodrie, LA to its current location in Paradis. Rec. St. Bernard Parish, Baritaria (Crown Point), and Acadiana Sec. Graham worked hard to keep expenses down. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT, United States Tax Court.https://leagle.com/images/logo.png. Foster, announced that The Louisiana Land and Exploration Company is donating to the State of Louisiana the surface rights to its land holdings in the Isles Dernieres chain of barrier Leagle.com reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions. 1.613-3(a), Income Tax Regs. We aim to provide a wide range of injection molding services and products ranging from complete molding project management customized to your needs. Ronald H. Section 613(b)(7), however, does not appear to exclude from percentage depletion under section 613 all minerals from oil and gas wells. (Cf. "The normal royalty was one-eighth (12 percent). In the early 1980s, industry economics changed LL&E's fortunes. WebThe company changed its name to St. Mary Land & Exploration Company on October 13, 1992 and then shortly thereafter, went public on the NASDAQ exchange with the ticker symbol MARY. 7295. The Louisiana Land and Exploration Company LLC has 581 employees, and the revenue per employee ratio is $481,927. 613A(c)(3). percent. A "warranty" contract is an arrangement whereby the producer is obligated to deliver to the purchaser certain quantities of gas; the source of the gas is unspecified and the producer may therefore fulfill his obligation from any source he chooses. 612. There is no question that there are no particular gas reserves governed by warranty contracts entered into by Texaco. There are generally two types of marketing contracts for the sale of gas. We agree with the district court that Section 109 applies. 3301 et seq. Section 613A(e)(1) defines "crude oil" as including "a natural gas liquid recovered from a gas well in lease separators or field facilities." The Louisiana Land and Exploration Company filed as a Foreign For-Profit Corporation in the State of Texas and is no longer active.This corporate entity was filed approximately eighty-four years ago on Monday, October 9, 1939 , according to public records filed with Texas Secretary of State.It is Respondent further argues that Congress would not have used the term "oil and gas wells" as opposed to simply "oil and gas" if it had not intended to limit percentage depletion for all products of oil and gas wells. pop(2000e) 4469000; area Commissioner v. Engle, 464 U.S. 206 (1984). WebHistorical stocks and bonds, Autographs, Americana, Ephemera, Numismatics and all forms of paper collectibles specializing in Uncancelled bonds Respondent's position in this case thus seems to conflict with his reading of section 613A as expressed in one of his published rulings. The carbon dioxide is vented to the atmosphere. At that time, the lodge housed the Louisiana Land and Exploration Companys crew while they constructed a levee around the 3,000 acre property. Because of the exception of subparagraph (C) and the restriction of subsection (d),9 respondent argues that this sulphur is not depletable under section 613. Browse lease owners by state in the United States of America, Browse owners by category (corporation, agency, private), Browse owners by interest relationship (partner, holder, agent, etc.). See Black's Law Dictionary 1278 (5th Ed.1979). After considering the language, structure and legislative record of the passage of section 613A, we do not believe that section 613A was intended to limit sulphur depletion pursuant to section 613(b)(1). Rec. WebThe Louisiana Land and Exploration Company Law Practice New Orleans, Louisiana 10 followers During the years in issue, petitioners were engaged primarily in exploration for and development, production, refining, and sale of crude oil and natural gas and exploration for, production and mining of other minerals such as sulphur, gold, silver, copper, and coal in the United States and several foreign countries. divided into 64 parishes (the only state to use this term for its (1) CRUDE OIL.The term "crude oil" includes a natural gas liquid recovered from a gas well in lease separators or field facilities. The Drillings accepts no liability for the content of this data, or for the consequences of any actions taken on the basis of the information provided. In February 1943, President E. B. Tracy signed a contract with Duval Texas Sulfur Co. that gave that company sulfur exploration, development, and production rights on LL&E's land and leased interests in Louisiana's Terebonne Parish. Hydrogen sulfide is a poisonous, highly corrosive gas which cannot be vented into the atmosphere in large quantities without serious deleterious effects. WebLL E is engaged primarily in exploration for and development of petroleum, natural gas and minerals. Current estimates show that the unit has a sales volume of $1500000 and staff of approximately 17 people. These geospatial data and related maps or graphics are not legal documents and are not intended to be used as such. After reviewing the law and the facts, we find that the district court was correct in its determination. According to the lower court, subsection (a) must be read in para materia with subsection (b) of Section 105 and subsection (a)(3) of Section 109, both of which refer to gas that is "subject to" or "not subject to" an existing contract. The minerals in the water are not developed for commercial use, and the brine water is reinjected into the well reservoir to maintain pressure. In 1975 the company opened a small refinery in Mobile, Alabama, to process 30,000 barrels a day of Jay Field crude. That year the company also saw initial returns from both the tertiary recovery project at Jay Field and the "A" platform of the Brae Field in the North Sea. 121 Cong. Follow Click on the case name to see the full text of the citing case. Responding to these problems, Phillips curtailed and then suspended copper mining, reduced staff, eliminated high-risk exploration ventures, cut back on capital expenditures, and in November reduced the cash dividend. For this reason, Congress chose to define natural gas by reference to what gases are depletable pursuant to section 611. Congress responded to this public outcry by repealing the percentage depletion allowance as applied to the major integrated oil companies.". Select a reason Rate this page Send feedback UBS flags buyback possibility after Second-quarter earnings beat In addition, in December 1976 LL&E acquired the Warrior River Coal Company, owners of a small surface mine in Tuscaloosa, Alabama. Deteriorating economic conditions, windfall profits taxes, high dry hole costs, narrower profit margins, and declining demand all pressured earnings. Raising this argument for the first time in his post-trial brief, respondent would argue a case that petitioners were unable to develop for trial and would, consequently, prejudice petitioners' case. The typical well stream in the Jay Field contains approximately 8.5 percent hydrogen sulfide and 2.2 percent carbon dioxide. Rec. The LOUISIANA LAND AND EXPLORATION COMPANY Between 1978 and 1980 LL&E's sales jumped from $549.4 million to $1.075 billion while earnings increased from $94.8 million to $180.2 million, despite $64 million in 1980 windfall profits taxes. To make up for this, LL&E participated in additional working interest wells and in 1970 discovered a major reserve estimated at 720 million barrels of oil in the Jay Field in Santa Rosa, Florida. Small producers must also separate hydrogen sulfide from natural gas before the natural gas may be transported through pipelines and used as fuel. In the case of oil and gas wells, "gross income from the property" has been interpreted to mean gross income from the sale of the property at the "well-mouth," i.e., before conversion or transportation. Congress also was concerned, however, with the shortage of hydrocarbon fuels and the need to encourage domestic exploration for and exploitation of new sources of fuel. Sec. 121 Cong. And profit sharing on top of the royalty was unheard of.". He notes that the "oil and gas well" language has been in the Code since percentage depletion was enacted in 1926 and argues that Congress would have changed it if it intended only to limit oil and gas depletion. Click on the case name to see the full text of the citing case. L. 69-20, sec. originally applied to the entire Mississippi R basin, claimed for (It is the biggest producer of crawfish in the world), cotton, soybeans, Forbes criticized the offer, charging that the company had waited too long to get into explorations and would be left with expensive deeper water wells. oil and natural gas were discovered; capital, Baton Rouge; other During the 1950s, CEO Robert M. Youngs began investing in working interest wells. to a substantial portion of the, New Orleans metropolitan LL&E reported 1986 losses of $20.6 million. R.S. Cf. Instead, we find that the value of the gas within the terms of the leases is a disputed factual issue to be determined at the hearing on damages. The company was incorporated in 2010 and is based in New Orleans, Louisiana. The goal of the legislation was to continue to provide the tax incentive of percentage depletion to small producers and royalty owners to encourage exploration for and exploitation of domestic oil and gas reserves while eliminating such tax incentives for the major integrated oil companies. 4606 (1975). The Copper Range acquisition did not please the financial community. The exemptions from the general rule of section 613A(a) denying percentage depletion for oil and gas wells, however, function only when applied to hydrocarbon fuels. The Drillings is a resource for locating where oil and gas leases are and have been. For example, we don't hesitate to use consultants. All Rights Reserved Seeking new profit sources and seeing links between fossil fuels and mineral extraction, Phillips laid out $51 million for the Copper Range Company in May 1977. 312, 318 (1976)), the evidence in this case does not justify our ignoring the parties' stipulation. (a) GENERAL RULE.Except as otherwise provided in this section, the allowance for depletion under section 611 with respect to any oil or gas well shall be computed without regard to section 613. The same year he paid $486 million for Inexco Oil Co., an oil company with reserves that included 9.9 million barrels of liquids and 392.7 million cubic feet of domestic natural gas reserves. At all relevant times, petitioner sold the sulphur it produced to Freeport Minerals Co. In determining this price, Texaco claims that Section 105 of the NGPA, entitled "Ceiling price for sales under existing intrastate contracts," is applicable. It replaced 203 percent of expended reserves, adding 55 million equivalent barrels of oil and natural gas, 46 percent of which came from the East Brae Field. 613A(c)(3). Respondent's position, although technically viable, is supported neither by legislative history nor by common usage of the term "natural gas." 1812; seceded from the Union, 1861; re-admitted, 1868; experienced The LL & E leases require Texaco to pay royalties based upon a percentage of the value of the gas produced. 613(A)(c)(4). WebThe company's petroleum operations are conducted in the continental United States, the federal offshore area in the Gulf of Mexico, the North Sea, Colombia, and Indonesia. WebThe Louisiana Land and Exploration Co. (LLEC) (defendant) claimed that it was the actual owner of the land between the Liners recorded title boundary and Bayou Dufrene. WebContinuing the marriages among energy companies, Burlington Resources Inc. agreed to acquire Louisiana Land & Exploration Co. for about $2.44 billion in stock. In 1960 Youngs signed a second contract with Texaco that subjected 275,625 additional acres to six years of exploration and development. Listed below are those cases in which this Featured Case is cited. Commissioner v. Engle, 464 U.S. at 218. Earnings recovered in 1989 as oil prices rose while replacement costs remained low. When brought to the surface, all of the items in the wells are physically mixed. The Louisiana Land and Exploration Company LLC revenue is $280.0M annually. It continued, however, with its policy of contracting other firms to perform seismic surveys and other exploration and development tasks. Milling, Benson, Woodward, Hillyer, Pierson & Miller, Charles D. Marshall, Jr.. Moreover, because petitioners do not qualify for percentage depletion under the exemptions set forth in section 613A(b) and section 613A(c), the sulphur is also not eligible for percentage depletion under section 613A. A literal reading, however, aims the statutory restrictions on percentage depletion at any mineral produced along with oil or gas when the legislative record of section 613A's passage is wholly devoid of mentioning any such important targets. Whether it is filing a lease or researching one, the administering BLM office is going to be the definitive source. Rule 91(e), Tax Court Rules of Practice and Procedure. There are no known limits on the percentage of hydrogen sulfide a well can contain and still remain economically viable as a source of oil and gas.
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