After winning the proxy fight in 1983, Phillips sold LL&E's coal properties and bought back 71 million shares for $212.8 million. We agree with the district court that Section 109 applies. Contact Information Website lle.com Ownership Section 613A bars percentage depletion for oil and gas wells with two exceptions. WebThe Louisiana Land and Exploration Company Overview. Respondent further submits that Congress did not need to define "crude oil" because crude oil and brine water are the only minerals in liquid form extracted from oil and gas wells and are readily distinguishable. 613A(c)(3). At that time, the lodge housed 121 Cong. In the contract, which was very generous for its time, Texaco agreed to pay LL&E a 25-percent royalty on production and 8 percent of its net profits on a dome-by-dome basis. Congress' goal of encouraging domestic production would in that event be thwarted. 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. 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 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. 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. Preserve, headquartered in New Orleans, with units in 613A(c)(1). Petitioners, the Louisiana Land & Exploration Co. (LL&E) and Subsidiaries, are an affiliated group of corporations whose common parent is LL&E. State in S USA, The term "subject to," in its ordinary sense, means "subordinate to" or "governed or affected by". 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. That year also marked Steward's conclusion of a property exchange that substantially increased LL&E's interest in the Madden Field in Wyoming. Congress responded to this public outcry by repealing the percentage depletion allowance as applied to the major integrated oil companies.". 16. 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. 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. to a substantial portion of the, New Orleans metropolitan Finally in 2018, the camp was yet again renovated turning it into the beautiful lodge it is today. 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. Decisions will be entered under Rule 155. 7295-7296 (1975). Land & Expl. 17-057-02316: Well Direction: Operator: HUMBLE OIL AND REFINING CO. 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. 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. R.S. 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. As the largest owner of environmentally sensitive wetlands in the continental United States, LL&E had long been careful to protect its investment. Louis Hennepin, Lahontan, Louis Narcisse Baudry des Lozires, Jean-Baptiste Bnard de La Harpe, and Laval. Costs were low at $3.23 per barrel and by year's end, LL&E's reserve life index stood at 8.4 years, nearly double that of 1980. Such allowance shall not exceed 50 percent of the taxpayer's taxable income from the property (computed without allowance for depletion). To do this, he committed major amounts of capital to new exploration initiatives. Subparagraph (C), which states the oil and gas well exception from depletion, states simply "oil and gas wells." As the company expanded into working interests, it hired geologists, geophysicists, and engineers. WebProperties Operated by Louisiana Land & Exploration Co View All Properties Operated by Louisiana Land & Exploration Co Recent Permits Filed by Louisiana Land & Exploration Co Company Contact Information These are the contact records we have for Louisiana Land & Exploration Co. 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. L. 94-12, sec. 4611 (1975) (remarks of Representative Green); 121 Cong. This appeal stems from the granting of a motion for partial summary judgment in favor of the Louisiana Land and Exploration Company (LL & E). Respondent's position, although technically viable, is supported neither by legislative history nor by common usage of the term "natural gas." 613A(c)(4). 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. Since then, the area around Paradis has attracted generations of hunting and outdoor enthusiasts alike. Natchitoches, Cane River Creole National Historical Park in The minerals in the water are not developed for commercial use, and the brine water is reinjected into the well reservoir to maintain pressure. The sulphur is then condensed and stored until sold. 501, 89 Stat. 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. 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. During the 1950s, CEO Robert M. Youngs began investing in working interest wells. The property has been operated as a hunting lodge since the 1960s. 121 Cong. The early 1960s proved very successful for LL&E. Hydrocarbons are organic compounds containing only hydrogen and carbon and are most commonly used as fuels. TEXACO, INC. Court of Appeal of Louisiana, Fourth Circuit.https://leagle.com/images/logo.png. percent. In 1989, the company spun off Plum Creek 1971). 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. Outside of Louisiana, Youngs acquired mineral rights and royalty interests on 152,870 acres in Texas, New Mexico, North Dakota, South Dakota, Montana, Colorado, Florida, and Mississippi. We find that it was appropriate, and therefore affirm the ruling of the district court. Saline 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. To make matters worse, copper revenues declined and precious metals margins shrank. The district court's decision is a proper partial summary judgment under Louisiana Code of Civil Procedure article 966(C), which provides that summary judgment "may be rendered on the issue of liability alone although there is a genuine issue as to the amount of damages." area, Baton Rouge metropolitan 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. In 1943, for instance, LL&E employed only 24 people, yet earned $1.8 million on sales of $3.4 million. 7770-7773, 7813 (1975). In 1984, large additions and renovations were made to the lodge, increasing the size of the camp to accommodate more guests. Field / Formation: LAKE DES ALLEMANDS / THE LA LAND & EXPLORATION CO U 004: Well Status: DRY AND PLUGGED: Well Type: Township Range Section: 13S 19E 022: Derrick Elevation: Members Only: Kelly Bushing Elevation: 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. According to LL & E, the ceiling price for the gas is fixed by Section 109 of the NGPA, which provides, in pertinent part: In granting LL & E's motion, the district court found that although the gas was being "sold under" contracts existing when the NGPA was adopted, as is required by subsection (a) of Section 105, this fact was not enough to submit the gas to the Section 105 price limitation. 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." 95, respondent considered whether carbon dioxide extracted from a carbon dioxide well for injection into oil fields as a drive mechanism for the recovery of oil is eligible for depletion pursuant to section 613 or section 613A. (Lafayette), New Orleans Jazz National Historical The contract would remain in effect for as long as Texaco continued to drill on the acreage. Rec. an economic revolution in the early 1900s when large deposits of Respondent raises a final argument for the first time on brief that sulphur derived from hydrogen sulfide cannot be depletable pursuant to section 613 because it is not possible to calculate "gross income from the property" with respect to the sulphur as section 613(c) requires. LL&E is a Maryland corporation having its principal office at New Orleans, Louisiana. 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. on the history of New Orleans (q.v. Natural gas, in contrast, is a broad concept encompassing many types of gases and is, therefore, more difficult to define. 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. Natural hazards may or may not be depicted on the data and maps, and land users should exercise due caution. In 1981 earnings fell to $145.2 million despite revenues of almost $1,277.5 million. 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. Gayle Land Exploration Co specializes in Oil And Gas Exploration Services. Wisner was struck by swampy southern Louisiana's resemblance to the low-lying Netherlands, where industrious farmers had reclaimed millions of acres for farming. The Louisiana Land and Exploration Company LLC operates as a subsidiary of ConocoPhillips. growth rate 2000?2005, Cane River National Heritage Area near In 1987 the company began to acquire newly opened low cost leases in the shallow waters of the Gulf of Mexico. Co. Linder Oil Co. A Partnership P.C.S.I. this group, the explorer Antoine Simon Le Page du Pratz may be considered 121 Cong. The typical well stream in the Jay Field contains approximately 8.5 percent hydrogen sulfide and 2.2 percent carbon dioxide. 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. 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. Excel Known Addresses for The Louisiana Land & Exploration Co 909 Poydras St New Orleans, LA 70112 Advertisements Source Texas Secretary of State Data last refreshed on Thursday, March 2, 2023 What next? We conclude that in drafting section 613A, Congress intended to limit percentage depletion only for income from hydrocarbon fuels. 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. 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. 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. Regulated natural gas is gas regulated by the Federal Power Commission, which regulates only the price of fuels. Crude oil is measured and sold by barrels. Information hosted on The Drillings is based on publicly available data through the Bureau of Land Management. The Louisiana Land and Exploration Company LLC main competitors are Tallgrass Energy, BP Pipelines, and Vastar Resources. The Drillings is a resource for locating where oil and gas leases are and have been. Moreover, the legislative record tends to show that Congress believed it was not restricting percentage depletion under section 613 for any minerals except oil and gas. Rec. Sec. 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 LL & E leases require Texaco to pay royalties based upon a percentage of the value of the gas produced. 17-089-00532: Well Direction: Operator: HUMBLE OIL AND REFINING CO. Pursuant to section 613A, oil and gas wells qualify for percentage depletion in narrowly limited circumstances. 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). 7295. pop(2000e) 4469000; area In the early 1970s, however, its Louisiana reserves began their natural decline. WebThe Louisiana Land & Exploration Co is listed as an officer of another company. (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. denied 382 U.S. 892 (1965). WebThe La Land & Exploration Co U 004: API No. (It is the biggest producer of crawfish in the world), cotton, soybeans, 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). WebThe Louisiana Land and Exploration Company LLC * 5 Principals See who the company's key decision makers are 3 Contacts Reach the right people with access to detailed contact Court of Appeal of Louisiana, Fourth Circuit. 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. The data and maps may not be used to determine title, ownership, legal descriptions or boundaries, legal jurisdiction, or restrictions that may be in place on either public or private land. The gas referred to in these sections is hydrocarbon gas. 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. 30:29 (referred to as Act 312), this oilfield remediation case involved the Vermilion Parish School Board (VPSB), individually and on LL&E reported 1986 losses of $20.6 million. It is true that the statutory language on its face is incongruous. Headquartered in New Orleans, it operates a crude oil refinery near Mobile, Alabama, and conducts exploration and production operations in the United States and selected foreign countries. Select a reason Rate this page Send feedback UBS flags buyback possibility after Second-quarter earnings beat Thus, respondent's proposed statutory construction, which assumes an inadvertent failure by Congress to draft the right language, cannot be harmonized with the provision for depleting sulphur pursuant to section 613(b)(1). These moves strengthened LL&E's overall position, but plunging oil prices and the Copper Range charge took their toll. Escalating energy prices and the Arab oil embargo awakened the public to the Nation's growing reliance on foreign energy resources. Commissioner v. Engle, 464 U.S. 206, 218 (1984). LL&E enjoyed a good exploration year in 1990. 6903 (1975) (statement of Senator Bentsen). 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. 4638 (1975); S. Rept. Finally, respondent's interpretation of section 613A conflicts with normal usage of the term "natural gas" as meaning fuel. Through the 1930s and 1940s, LL&E collected royalties on oil and minerals extracted from the land it owned and controlled. The Louisiana Land and Exploration Company explores, develops, and produces petroleum natural gas resources. 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. 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. Canada by the British in the 18th-c); areas devastated by Hurricane The primary products from the Jay Field wells and processing facilities have been oil and natural 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. 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. Envisioning farming on a grand scale, Wisner bought hundreds of thousands of acres, built levees, and drained the land. Not satisfied? "Our organization," he told Dun's "is the non-rigid, non-army type. 979 (1961), affd. pelts, especially muskrat; second only to Texas in oil and natural 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. Depletion generally is calculated based on the cost of the property. Section 613A(b), providing percentage depletion for "regulated natural gas" and "natural gas sold under a fixed contract" also makes sense only if section 613A applies solely to hydrocarbon fuels. area, List of school districts in v. Rec. gas production (mainly offshore); oil refineries and petrochemical 21 Engel Injection Molding Machines (28 to 300 Ton Capacity), 9 new Rotary Engel Presses (85 Ton Capacity), Rotary and Horizontal Molding, Precision Insert Molding, Full Part Automation, Electric Testing, Hipot Testing, Welding. The nonhydrocarbon gases extracted from the Jay Field wells are primarily hydrogen sulfide and carbon dioxide. Learn more about the Bureau of Land Management, Public Land Survey System, and oil and gas leases. 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. In 1974 Jacinport reported $2 million in real estate sales. Moreover, because of varied corporate exploration philosophies and changes in drilling and seismic forecasting techniques, LL&E was constantly leasing and re-leasing the same acreage to different operators. E.g., 121 Cong. LOUISIANAS MOST CAPTIVATING HUNTING LODGE & WILDLIFE RESERVE. Spots was recovered from an adjoining area in 1986 by the original land owners, Louisiana Land and Exploration Company, and lived on the grounds until he was donated to the Audubon Zoo in 1990. Respondent thus argues that because the sulphur in issue is a product of oil and gas wells, it loses its section 613 depletion allowance. 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.