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. The standard history of the state, though only through 17-089-00532: Well Direction: Operator: HUMBLE OIL AND REFINING CO. Cf. processing, transportation equipment, paper products, and Join our mailing list to get alerts for lease listing updates, new features, and special opportunities. (c) EXEMPTION FOR INDEPENDENT PRODUCERS AND ROYALTY OWNERS., (1) IN GENERAL.Except as provided in subsection (d), the allowance for depletion under section 611 shall be computed in accordance with section 613 with respect to. 121 Cong. This figure included $181 million for 215 wells; $64 million for leases in Wyoming, the Gulf of Mexico, Australia, Indonesia, Columbia, and the North Sea; and $286 million for construction at Brae Field, platforms in the Gulf of Mexico, and a tertiary recovery project at Jay Field. Oil and Gas Indian Communitization Agreement, Oil and Gas Simultaneous Lease Drawing (SIMO) on Public Land, Oil and Gas Simultaneous Lease Drawing (SIMO) on Acquired Land, Oil and Gas Non-Competitive Lease on Acquired Land, Louisiana Land & Exploration Co. is listed with 11 total leases. About Our Hunting Lodge in Paradis, LA | The Island 123673km/47752sqmi. The carbon dioxide is vented to the atmosphere. Rec. Respondent argues that the two provisions are interdependent in that section 613A(e)(2) defines natural gas in terms of products depletable under section 611 and section 613, and in enacting section 613A and amending section 613, Congress intended to transfer percentage depletion for all products of oil and gas wells to section 613A. Management trumped Caspary, however, when it pledged to spin off to stockholders a tax-sheltered royalty trust holding oil and gas properties that generated $30 million a year. The extent of the damages, if any, suffered by LL & E must be determined in a further proceeding. Because the rules of section 613A work on the foundation of section 613, we look first to the plain language of section 613. Moreover, respondent's reading of section 613A could discourage oil and gas production by independent producers and royalty owners, which would be contrary to congressional intent. After winning the proxy fight in 1983, Phillips sold LL&E's coal properties and bought back 71 million shares for $212.8 million. Sec. Natchitoches, Cane River Creole National Historical Park in The gas referred to in these sections is hydrocarbon gas. The company became a public company . Current estimates show that the unit has a sales volume of $1500000 and staff of approximately 17 people. Respondent articulated the applicable principles as follows: Although in the physical sense [carbon dioxide] is a gas, it is not the gas referred to in the term "oil and gas wells" in sections 263(c), 611, 613, and 613A of the Code. Milling, Benson, Woodward, Hillyer, Pierson & Miller, Charles D. Marshall, Jr., Appeal Counsel, David N. Schell, Jr., New Orleans, for plaintiff-appellee Louisiana Land and Exploration Co. Gene W. Lafitte, Appeal Counsel, George J. Domas, Anne E. Tate, Liskow & Lewis, and Frederick W. Veters, Patrick J. Butler, Larry N. Port, Robert E. Plumb, Jr., James D. Hurley, Texaco Inc., New Orleans, for defendant-appellant Texaco, Inc. In the 1950s, CEO Robert M. Youngs began to guide LL&E into other exploration, both on its own lands and on land it leased in other U.S. areas of production. Percentage depletion for natural resources has been a part of the Internal Revenue Code since the Revenue Act of 1926. The Louisiana Land and Exploration Company LLC v. Visit DandB.com to locate more business profiles. For the purposes of this subsection, minerals (other than sodium chloride) extracted from brines pumped from a saline perennial lake within the United States shall not be considered minerals from an inexhaustible source. (a) GENERAL RULE.In the case of the mines, wells, and other natural deposits listed in subsection (b), the allowance, for depletion under section 611 shall be the percentage, specified in subsection (b), of the gross income from the property excluding from such gross income an amount equal to any rents or royalties paid or incurred by the taxpayer in respect of the property. The minerals in the water are not developed for commercial use, and the brine water is reinjected into the well reservoir to maintain pressure. "It was a very unusual contract for 1928," LL&E president Ford Graham told Dun's Review in 1965. 613A(c)(3). Katrina (notably New Orleans) in 2005. Oil and Gas Producers | Houma, LA - Manta.com The diagram on the facing page summarizes the sour production processing system used at the Jay Field Wells. WebDetails for well Sweet Lake Land And Oil Co 001 | API # 17-023-20688 | operated by McMoran Exploration Company in Cameron Parish, LA. These diversification adventures were possible in part because of high profits in the oil industry. Forbes called Copper Range "a company so bad that some analysts wondered whether it was acquired to make Louisiana Land unattractive as a takeover candidate." State in S USA, In 1930 Texaco also agreed to pay LL&E's $1.8 million funded indebtedness. Company HistoryOil & Natural Gas Extraction. Such allowance shall not exceed 50 percent of the taxpayer's taxable income from the property (computed without allowance for depletion). And when we're finished we don't own the computer or have the people on our permanent payroll. For purposes of the preceding sentence, the allowable deductions taken into account with respect to expenses of mining in computing the taxable income from the property shall be decreased by an amount equal to so much of any gain which (1) is treated under section 1245 (relating to gain from disposition of certain depreciable property) as ordinary income, and (2) is properly allocable to the property. 979 (1961), affd. Some thought the major integrated oil companies were reaping excessive oil and gas profits at the public's expense, while reinvesting little of their concomitant tax depletion subsidies in domestic energy production. 613(b)(1)(A). 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. Congress chose 6,000 to one as the conversion ratio because one barrel of oil has the equivalent heating value of 6,000 cubic feet of "natural gas." Contact Information Website lle.com Ownership Louisiana has 3 personal income tax brackets, ranging from 2 percent to 6 If gases that are never used as fuels, such as hydrogen sulfide, were considered natural gases for purposes of section 613A(c), the conversion ratio would be nonsensical. Sec. In 1928 LL&E signed a contract with Texas Co. (now Texaco) in which that company agreed to lease all of LL&E's acreage around ten productive salt domes. For example, we don't hesitate to use consultants. 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. A 1915 hurricane destroyed many of the levees that Wisner had constructed. See 121 Cong. Products; Resources; My Account; Talk to a D&B Advisor 1-800-280-0780. Business Directory. During the 1960s, CEO Fred Graham began a process of diversification that would eventually include a Hawaiian resort, a coastal industrial real estate operation, and coal, gold, and copper mines. Sec. Louisiana ", But while Graham focused on controlling costs, he, like other CEOs of that era, also sought profits in new businesses. France by La Salle, 1682; most of the E region ceded to Spain in The well effluent is initially treated in a separation system which uses gravity to separate the effluent into brine water, sour crude oil, and a sour gas stream containing natural gas, hydrogen sulfide, and carbon dioxide. Park, Poverty Point National Monument at These moves strengthened LL&E's overall position, but plunging oil prices and the Copper Range charge took their toll. In general, while cost depletion continued to be available, section 613A eliminated percentage depletion for gross income from oil and gas for major integrated oil companies. The "depletable natural gas quantity" is whatever portion of its depletable oil quantity the taxpayer chooses to convert to natural gas at a conversion ratio of 6,000 cubic feet of gas to one barrel of oil. Respondent, however, has entered into a stipulation of facts with petitioner pursuant to which he agreed as follows: Petitioner[s] claimed percentage depletion deductions on sulphur in [their] tax returns in the following amounts: If Petitioner[s'] sulphur production is subject to depletion under section 613(b) of the Code, Petitioner[s] [are] entitled to the sulphur percentage depletion deductions listed above. Section 613,7 however, provides an allowance for depletion for certain mines, wells, and other natural deposits based on a specified percentage of the gross income from the property less any rents or royalties paid or incurred in respect of the property. The term "subject to," in its ordinary sense, means "subordinate to" or "governed or affected by". After extensive research and analysis, Zippia's data science team found the following key financial metrics. The LL & E leases require Texaco to pay royalties based upon a percentage of the value of the gas produced. At year's end, he was able to salvage earnings of $76.3 million despite mining operations that sustained a pretax loss of $38 million. Although it did not expressly hold that "oil and gas wells" means "oil and gas," the Court referred repeatedly to oil and gas production, not the production of minerals from oil and gas wells. We aim to provide a wide range of injection molding services and products ranging from complete molding project management customized to your needs. "The normal royalty was one-eighth (12 percent). Also, the company opened its first regional office in Shreveport, LA after acquiring the oil and gas division of T.L. Louisiana, List of colleges and universities in Congress thus retained percentage depletion for small, independent producers to encourage domestic production. The primary issue on appeal is whether that value should be determined under Section 105 of the NGPA, as Texaco argues, or under the higher ceiling price reflected in Section 109 of the NGPA, as LL & E claims. Thus, it falls in the category of all other minerals described in section 613(b)(7) and is eligible for percentage depletion at the rate of 14 percent. 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 16. Both are part of the PLSS measurement system but have different uses. Until 1982, the Frasch mining industry was the dominant source of sulphur in the world. During the House debates, Representative Rhodes noted "that one of the reasons for this bill being brought here with some haste is the fact that we have a shortage of domestic petroleum." We must decide whether section 613A eliminates the section 613 percentage depletion rate on sulphur when hydrogen sulfide is produced from an oil and gas well and subsequently converted into elemental sulphur. 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. 3301 et seq. 312, 318 (1976)), the evidence in this case does not justify our ignoring the parties' stipulation. Louisiana Land And Exploration Company It soon became apparent that the land owned by Louisiana Land and Exploration, as the company was renamed in 1927, was rich in petroleum resources. 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. On this reasoning, respondent concludes that "natural gas" within the meaning of section 613A includes all gases produced from an oil and gas well because all such gases are depletable under section 611. The well effluent from the Jay Field wells is treated in facilities adjacent to the wells. Representative William Green introduced an amendment to repeal percentage depletion for oil and gas during the floor debates in the House but the Senate Finance Committee deleted the provision. The depletable oil quantity is measured in barrels. In 1935, after Texaco had been fully reimbursed, LL&E paid its first dividends. In exchange for this, Texaco would retain one-half of the royalties and profits payable to LL&E up to the amount of $800,000. It also sought to expand riskier but potentially more lucrative foreign exploration. oil and natural gas were discovered; capital, Baton Rouge; other The Supreme Court has interpreted "oil and gas wells" to mean the oil and gas produced from such wells. Louisiana Land and Exploration Company In 1960 Youngs signed a second contract with Texaco that subjected 275,625 additional acres to six years of exploration and development. Section 613(b)(7) is a catch-all provision for minerals not mentioned elsewhere in the subsection. LOUISIANA LAND AND EXPLORATION COMPANY This section provides, in pertinent part: Relying on this Section, Texaco has been paying royalties to LL & E based upon the contract prices specified by the warranty contracts which Texaco has been servicing with the LL & E gas. Respondent interprets section 613A(e) as follows: Section 613A(e)(2) provides a definition; it is not an allowance section. The remainder of central and north Louisiana was home This web site and associated pages are not associated with, endorsed by, or sponsored by The Louisiana Land And Exploration Company and has no official or unofficial affiliation with The Louisiana Land And Exploration Company. Petitioners contend that section 613A applies only to hydrocarbon fuels and that sulphur, which is not a hydrocarbon, is depletable under section 613(b)(1). to a substantial portion of the, New Orleans metropolitan 7295. To this end, in 1991 LL&E acquired two interests in Australia and applied for a concession in Papua New Guinea. Section 613A(c) provides limited percentage depletion for independent producers and royalty owners based on a depletable oil quantity of 1,000 barrels per day. There are generally two types of marketing contracts for the sale of gas. The contract would remain in effect for as long as Texaco continued to drill on the acreage. and its Licensors
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