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. the more important, as well as the publications of the 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. The works of Albert Phelps and Grace King should also be mentioned among LAND EXPLORATION CO Graham worked hard to keep expenses down. While entities may have multiple locations, this is based on the address registered for the lease. Respondent's view may be a valid literal reading of section 613A(e)(2). Wolf Exploration Company shall, as to such leases, be entitled to the same overriding royalty, provided for hereinabove in paragraphs 1.1.1 through 1.1.5. Not satisfied? The Louisiana Land and Exploration Company LLC 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. The town of Paradis, LA traces its history back to 1856 whenEdouard Paradis came down from Quebec, Canada to provide crossties for the railroads being constructed in St. Charles Parish. In 1943, for instance, LL&E employed only 24 people, yet earned $1.8 million on sales of $3.4 million. Louisiana Land and Exploration Co List of official symbols of WebThe Louisiana Land and Exploration Company was presented the 1997 National Association of Conservation Districts (NACD) Business Conservation Leadership Award at a luncheon WebLouisiana Land & Exploration Co. / API # 33-023-00257 Well Summary Well Name: Germany 34-14 1 API #: 33-023-00257 Operator: Louisiana Land & Exploration Co. County: Divide County, ND Production Dates on File: No Production Data Available Map of Germany 34-14 1 Germany 34-14 1 Well Details Nearby Wells API # 33-023-00448 | Burtman 19-1 First, percentage depletion is permitted with respect to certain domestic gas wells for regulated natural gas, natural gas sold under a fixed contract, and natural gas from geopressured brine. 612. Burlington Resources - Wikipedia Depletion generally is calculated based on the cost of the property. 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. percent. Natchitoches, Cane River Creole National Historical Park in The brine water is reinjected into the well. L. 69-20, sec. 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. We find that it was appropriate, and therefore affirm the ruling of the district court. 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." Natchez, Jean Lafitte National Historical Park and LL & E's position is that Section 105 does not determine the ceiling price for this gas because the gas is not "subject to" any contract; instead, the LL & E gas is being used to fulfill these particular contracts solely because Texaco has chosen to use it rather than to use gas from other reserves. Louisiana Land and Exploration Company (LL E) filed this possessory action on November 12, 1992, relating to two sections of marshland property (Sections 27 and 28, Township 19 South, Range 20 East) in Lafourche and Terrebonne Parishes and seeking to stop the individual defendants from their alleged acts of trespass and damage on the property. To this end, in 1991 LL&E acquired two interests in Australia and applied for a concession in Papua New Guinea. 121 Cong. 121 Cong. Leagle.com reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions. Rec. One barrel of oil has the equivalent fuel value, measured in British Thermal Units (BTU's) of 6,000 standard cubic feet of natural gas.6. 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. It continued, however, with its policy of contracting other firms to perform seismic surveys and other exploration and development tasks. Rec. That year also marked Steward's conclusion of a property exchange that substantially increased LL&E's interest in the Madden Field in Wyoming. LL&E traces its roots to the 19th century, when midwestern businessman Edward Wisner moved to Louisiana for his health. Section 613A does not deny percentage depletion for [carbon dioxide]. Deteriorating economic conditions, windfall profits taxes, high dry hole costs, narrower profit margins, and declining demand all pressured earnings. 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. 3301 et seq. 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. The Louisiana Land and Exploration Company (LL&E) is one of the largest independent oil and gas exploration companies in the United States. The venture's finances faltered and in time there were foreclosures. Citations are also linked in the body of the Featured Case. 7295-7296 (1975). Louisiana Historical Society and several works Natural hazards may or may not be depicted on the data and maps, and land users should exercise due caution. Rec. The state's principal agricultural outputs include seafood 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. 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. posthumous and further expanded edition in We conclude that in drafting section 613A, Congress intended to limit percentage depletion only for income from hydrocarbon fuels. In 1946, this original structure was acquired from the Sun Oil Company and transported by barge from Cocodrie, LA to its current location in Paradis. Copyright 2023 Web Solutions LLC. Louisiana Land And Exploration Company Sec. Listed below are the cases that are cited in this Featured Case. Listed below are those cases in which this Featured Case is cited. this group, the explorer Antoine Simon Le Page du Pratz may be considered 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. Lease No. 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. 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. 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. 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." Such allowance shall not exceed 50 percent of the taxpayer's taxable income from the property (computed without allowance for depletion). LL&E is a Maryland corporation having its principal office at New Orleans, Louisiana. 7770-7773, 7813 (1975). 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. Rul. The contract would remain in effect for as long as Texaco continued to drill on the acreage. 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 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. After extensive research and analysis, Zippia's data science team found the following key financial metrics. Rec. Both are part of the PLSS measurement system but have different uses. In 1965 LL&E had only 145 employees. Claus sulphur recovery plants, however, were not economically attractive investments until the value of sulphur began to rise significantly in the 1960's. 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. LL & E, which leases certain lands to Texaco for the production of gas, brought suit against Texaco claiming Texaco had failed to pay proper royalties under the leases. 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. Rec. In Rev. 30292-85, 37799-85, 47753-86. Oil and gas often become trapped in the pockets that form around these structures.) After reviewing the law and the facts, we find that the district court was correct in its determination. 121 Cong. The Louisiana Supreme Court has already held that the value of natural gas upon which royalty is owed may not exceed the price to which sale of that gas is limited by federal regulation. See Black's Law Dictionary 1278 (5th Ed.1979). The Louisiana Land and Exploration Company LLC has 581 employees, and the revenue per employee ratio is $481,927. 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 Louisiana Land and Exploration Company LLC is a relatively young During the 1950s, CEO Robert M. Youngs began investing in working interest wells. Since then, the area around Paradis has attracted generations of hunting and outdoor enthusiasts alike. Louisiana. Rec. For example, we don't hesitate to use consultants. 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. The minerals in the water are not developed for commercial use, and the brine water is reinjected into the well reservoir to maintain pressure. After processing, the crude oil is classified as sweet rather than sour oil. The acid gases (hydrogen sulfide and carbon dioxide) are separated from the natural gas through an absorption process. LOUISIANA LAND 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. Respondent's stipulation also suggests that the amount of the depletion deduction is susceptible of calculation. 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." Respondent argues that the amendments to section 613 were intended to eliminate percentage depletion not only for oil and gas but also for all other minerals produced from oil and gas wells except as provided in section 613A. ", But while Graham focused on controlling costs, he, like other CEOs of that era, also sought profits in new businesses. As a result, LL&E enjoyed low expenses and high profits. 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. In 1960 Youngs signed a second contract with Texaco that subjected 275,625 additional acres to six years of exploration and development. 613A(e)(2). There is no indication that Congress intended to limit percentage depletion for any products of oil and gas wells other than hydrocarbon fuels.12. To make matters worse, copper revenues declined and precious metals margins shrank. In 1975 the Kalua Koi Corporation, LL&E's 50-percent-owned Hawaiian operation, began construction on the first phase of a 298-unit hotel condominium complex. 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. Continuing to diversify, in 1968 Graham obtained the rights to participate in the resort development of approximately 50,000 acres on the western half of Molokai Island, Hawaii--an island previously best known for its leper colony. The percentage depletion rate for sulphur is 22 percent. The floor debates are replete with references to what some members believed to be huge profits enjoyed by the major integrated oil companies and a concomitant lack of need for percentage depletion for oil and gas income. Bayou, a National Wild and Scenic River in northern 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.