All Rights Reserved cattle, sugarcane, poultry and eggs, dairy products, and 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. This released acreage amounted to approximately 557,000 acres. This uncontradicted and consistent legislative record, therefore, reveals that Congress was concerned only with oil and gas when it approved section 613A. 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. The primary products from the Jay Field wells and processing facilities have been oil and natural gas. WebLouisiana Land & Exploration Co LLC/The - Company Profile and News - Bloomberg Markets Bloomberg Connecting decision makers to a dynamic network of information, people and TEXACO, INC. Court of Appeal of Louisiana, Fourth Circuit.https://leagle.com/images/logo.png. The gaseous effluent, or raw outflow, from the Jay Field wells is referred to as a "sour gas" stream, meaning a stream consisting of both natural gas and hydrogen sulfide with more than one grain of hydrogen sulfide per 100 standard cubic feet of the gaseous mixture. Sulphur has been recovered from hydrogen sulfide and sold as a by product of the processing facilities since the facilities were placed in operation. Caspary's charges had some legitimacy. Lease No. Claus sulphur recovery plants, however, were not economically attractive investments until the value of sulphur began to rise significantly in the 1960's. denied 382 U.S. 892 (1965). 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. Therefore, we hold that the district court correctly concluded that Section 109 of the NGPA regulates the ceiling price for the gas in question. 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. 17-089-00532: Well Direction: Operator: HUMBLE OIL AND REFINING CO. Foreign reserves are located in the U.K. and Dutch sectors of the North Sea, Canada, and Columbia. 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. 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. and paper industry; highly productive in agriculture; soybeans, Citations are also linked in the body of the Featured Case. It was solely Texaco's choice to meet its obligations to these customers with LL & E's gas. Natural hazards may or may not be depicted on the data and maps, and land users should exercise due caution. In 1966 he acquired Jacintoport Corporation, an industrial real estate firm with Gulf Coast holdings such as the Houston Ship Channel. As a result, LL&E enjoyed low expenses and high profits. 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. Furnel, Inc. has been successfully implementing this policy through honesty, integrity, and continuous improvement. Natural gas is measured and sold by standard cubic feet. Section 613A does not deny percentage depletion for [carbon dioxide]. 613A(c)(1). 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. Steward used excess cash flow--including $198 million from asset sales&mdash repurchase nearly 2.6 million shares and reduce LL&E's total debt by one-third. E.g., 121 Cong. Due to higher prices for refined copper, the mining operation even turned a profit of $9.7 million in 1979. L. 94-12, sec. to a substantial portion of the, New Orleans metropolitan Louisiana. Mascrier), Fr. 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. In 1980 he formed CLAM Petroleum, a 50 percent owned unconsolidated affiliate through which LL&E would invest $250 million in the U.K. North Sea's South Brae Field. Rec. (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. Envisioning farming on a grand scale, Wisner bought hundreds of thousands of acres, built levees, and drained the land. We, therefore, hold that pursuant to section 613(b), petitioners are entitled to percentage depletion deductions in the amounts stipulated for sulphur produced from oil and gas wells. tax rate is 1 percent: a .97 percent Louisiana sales tax In addition, natural gas contaminated by hydrogen sulfide cannot be burned or transported through pipelines because its corrosive nature would damage the combustion equipment and the pipelines. We offer full engineering support and work with the best and most updated software programs for design SolidWorks and Mastercam. Oil and gas often become trapped in the pockets that form around these structures.) Steward announced that LL&E would sell nonstrategic oil and gas properties and use the proceeds to repay long-term debt and repurchase up to 10 percent of outstanding stock. France by La Salle, 1682; most of the E region ceded to Spain in LL&E continued to do quite well in the late 1960s and early 1970s, reporting income of $51.9 million on 1970 sales of $114 million. In the Senate, Senator Dole remarked that "The 2,000 barrel * * * exemption from the depletion allowance repeal is vitally important to maintaining a high level of energy exploration and production," 121 Cong. When section 613A(e)(2) is read in conjunction with sections 611 and 613, together they function as a filter to exclude depletion allowances for anything produced from an oil and gas well except as permitted by section 613A(b) and section 613A(c). Texaco additionally contends that partial summary judgment was procedurally improper in this case both because the decision did not determine any portion of its liability to LL & E and because there are issues of disputed fact that prevent summary judgment. The problem in this case arose because Texaco, in an effort to secure a market for natural gas when it was not a particularly valuable commodity, entered into long term sales agreements with Louisiana industrial consumers promising future delivery of gas at what are now below-market prices. WebSearch the D&B Business Directory and find the GAYLE LAND EXPLORATION CO company profile in MONROE, LA. 7295. 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. Petitioners claimed percentage depletion on sulphur during the years in issue in the following amounts: Respondent issued his notices of deficiency and petitioners timely filed petitions on the following dates: If we find that petitioners' sulphur production is eligible for depletion under section 613(b), respondent concedes that petitioners are entitled to the percentage depletion deductions claimed. Company HistoryOil & Natural Gas Extraction. Natchez, Jean Lafitte National Historical Park and Section 613(b)(7) provides for percentage depletion at 14 percent for "all other minerals" except: Because petitioners' sulphur was not extracted from a mine but from hydrogen sulfide produced from oil and gas wells, respondent argues that the income from the sulphur is depletable, if at all, pursuant to section 613(b)(7) as an "other mineral." Bayou, a National Wild and Scenic River in northern 4638 (1975); S. Rept. Sec. The taxpayer may elect to convert part of his oil quantity into a depletable natural gas quantity based on a conversion ratio of 6,000 cubic feet of gas to one barrel of oil. 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. In 1981 earnings fell to $145.2 million despite revenues of almost $1,277.5 million. production; foods, clay, glass, transportation equipment; tourism Supported by the Hunt family, which boasted a 12.3 percent block of LL&E stock, Caspary attacked LL&E's record since the mid-1970s, pointing to declining earnings, reduced dividends, falling reserves, and the copper acquisition. Rec. 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. 95. 7295. 4, 972.) There is no question that there are no particular gas reserves governed by warranty contracts entered into by Texaco. Rec. LLEC began attempting to mark that boundary, first with a ditch and later by removing the Liners stakes at the edges of their claimed land. (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. Whether it is filing a lease or researching one, the administering BLM office is going to be the definitive source. Crude oil is measured and sold by barrels. Hydrogen sulfide is a poisonous, highly corrosive gas which cannot be vented into the atmosphere in large quantities without serious deleterious effects. If independent producers cannot claim percentage depletion for the sulphur they may recover from hydrogen sulfide before selling the hydrocarbon fuels extracted from an oil and gas well, there is less economic incentive to explore for and exploit new wells, particularly sour gas wells. 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. The venture's finances faltered and in time there were foreclosures. The Louisiana Land and Exploration Company explores, develops, and produces petroleum natural gas resources. 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. Deteriorating economic conditions, windfall profits taxes, high dry hole costs, narrower profit margins, and declining demand all pressured earnings. LL&E enjoyed a good exploration year in 1990. 17-023-20688: Well Direction: Operator: MCMORAN EXPLORATION COMPANY: Lease No. Specifically, "natural gas" subject to section 613A is defined to include "any product (other than crude oil) of an oil or gas well" if the product is eligible for depletion. The remainder of central and north Louisiana was home Section 613A(e) defines crude oil and natural gas for purposes of section 613A. Information hosted on The Drillings is based on publicly available data through the Bureau of Land Management. Wednesday, July 9, 1997. In a vessel called a contactor, an amine solution such as sulfinal is added to the sour gas. Lease No. Commissioner v. Engle, 464 U.S. 206 (1984). Co. Linder Oil Co. A Partnership P.C.S.I. Congress thus retained percentage depletion for small, independent producers to encourage domestic production. 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. 204(c)(2), 44 Stat. petroleum and 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. The acid gas next is separated from the amine solution and passed into a multistage Claus sulphur recovery system, where hydrogen sulfide is converted into molten elemental sulphur by controlled combustion with air. This type of contract differs from the so-called "dedication" contract, whereby the producer contracts with a customer agreeing to furnish all the gas produced from specified reserves, thus "dedicating" those reserves to the particular customer. LL&E's company earnings, $54.9 million in 1990, fell to $20.9 million in 1991 as falling oil and natural gas prices combined to make the year a difficult one. pop(2000e) 4469000; area Petitioners rightly assumed that the issue was settled and cannot now justly be required to prove the amount of the depletion deduction to which we have found they are entitled. (1975). (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. This criticism was borne out in December of that year when Lloxy paid $60 million for Gulf leases covering land under 300 feet of water. The property has been operated as a hunting lodge since the 1960s. 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. St. Bernard Parish, Baritaria (Crown Point), and Acadiana In the early 1980s, industry economics changed LL&E's fortunes. 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." Until 1982, the Frasch mining industry was the dominant source of sulphur in the world. Listed below are the cases that are cited in this Featured Case. Box 60350 New Orleans, Louisiana 70160 U.S.A. Toll Free: 800-351-1242 Fax: (504) 566-6891 Sec. Rec. Pursuant to section 613A, oil and gas wells qualify for percentage depletion in narrowly limited circumstances. Texaco pays 75 percent and gets 60 percent. 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. Docket Nos. 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. 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. [Emphasis supplied.]. 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. 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. and its Licensors The company's troubles climaxed the following year as investor Delo Caspary mounted a proxy fight to remove Phillips and the rest of management. Although there is scant legislative history on section 613A, the legislative record available leaves little doubt that section 613A was meant to apply only to hydrocarbon fuels. WebHistorical stocks and bonds, Autographs, Americana, Ephemera, Numismatics and all forms of paper collectibles specializing in Uncancelled bonds In addition, in December 1976 LL&E acquired the Warrior River Coal Company, owners of a small surface mine in Tuscaloosa, Alabama. In Herring v. Commissioner, 293 U.S. 322, 328 (1934), the Court held that the taxpayers were entitled to percentage depletion on bonuses received as advance payments for oil and gas to be extracted even though the well was not yet in operation, reasoning that the right to depletion was not conditioned on the existence of a well.11. In these consolidated cases, the Commissioner determined deficiencies in petitioners' Federal corporate income tax for the taxable years 1979, 1981, and 1982 as follows: The sole issue remaining for our decision is whether petitioners are entitled to percentage depletion pursuant to section 6131 on income from sulphur chemically converted from hydrogen sulfide produced from an oil and gas well. Prior to 1975, section 613 allowed percentage depletion for oil and gas wells. WebThe Louisiana Land and Exploration Company Law Practice New Orleans, Louisiana 10 followers Listed below are those cases in which this Featured Case is cited. growth rate 2000?2005, Cane River National Heritage Area near An "oil and gas well" is not itself a mineral, and to provide a depletion rate for "all other minerals except * * * oil and gas wells" would seem to require an implied reading that "minerals from" must have been intended. 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. THE LOUISIANA LAND AND EXPLORATION COMPANY DONATES THE ISLES DERNIERES CHAIN OF ISLANDS TO THE STATE OF LOUISIANA. tax. 7770-7773, 7813 (1975). Much of the land was eventually taken over by a group of midwesterners led by Henry Timken, who owned an Ohio ball bearing company. Respondent thus concludes that if hydrogen sulfide, from which sulphur is derived, is produced from an oil or gas well, it is depletable, if at all, only under section 613A. Sec. By 1970, an oversupply of sulphur seriously depressed prices,4 but the sulphur market recovered and the price of sulphur rose dramatically in the late 1970's and early 1980's.5. (e) DEFINITIONS.For purposes of this section. Mexico; rivers include the Mississippi (large delta area in the S), rice, sugar cane, sweet potatoes, cotton, cattle, dairy products; 1763, then to the USA in 1783; W region acquired by the USA in the Sec. Products; Resources; My Account; Talk to a D&B Advisor 1-800-280-0780. Business Directory. Louisiana Land & Exploration Co. is a corporation applicant based in New Orleans, Louisiana for 66 closed leases. In 1984, the Supreme Court considered the effect of section 613A on percentage depletion of oil and gas income and concluded that sections 611-613A permit an allowance for percentage depletion on lease bonuses at some point during the productive life of the lease, regardless of when actual production of oil and gas occurred. (b) PERCENTAGE DEPLETION RATES.The mines, wells, and other natural deposits, and the percentages, referred to in subsection (a) are as follows: (7) 14 PERCENTall other minerals * * * For purposes of this paragraph, the term "all other minerals" does not include. 979 (1961), affd. There are generally two types of marketing contracts for the sale of gas. Timken hoped to lease the land to fur trappers. Park, Poverty Point National Monument at Sec. 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. WebAsbestos & Mesothelioma, Medical Malpractice, Nursing Home Abuse, Personal Injury, Products Liability, Workers' Compensation Website Email Profile John J. Lynch Chicago, IL (630) 283-7091 Bankruptcy, Probate, Foreclosure Defense, Real Estate Law, Estate Planning Website Email Profile Depletion generally is calculated based on the cost of the property. gas production (mainly offshore); oil refineries and petrochemical 7239 (remarks of Senator Hollings). In 1987 the company began to acquire newly opened low cost leases in the shallow waters of the Gulf of Mexico. The Copper Range acquisition did not please the financial community. Through its subsidiary, The Louisiana Land and Exploration Company LLC (LL&E), ConocoPhillips is the largest private wetlands owner in Louisiana. LA. The carbon dioxide is vented to the atmosphere. Sec. posthumous and further expanded edition in Rul. Hydrogen sulfide and carbon dioxide are contaminants of natural gas.3 Sour gas cannot be used as fuel; the hydrogen sulfide and carbon dioxide must first be removed. Percentage depletion for natural resources has been a part of the Internal Revenue Code since the Revenue Act of 1926. WebContinuing the marriages among energy companies, Burlington Resources Inc. agreed to acquire Louisiana Land & Exploration Co. for about $2.44 billion in stock. Sulphur is depletable pursuant to section 613(b)(1) and not section 613(b)(7). increasing; world famous for the jazz music which grew up in and

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