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." Headquartered in New Orleans, it 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. (Cf. Phillips, meanwhile, continued to diversify. Wisner was struck by swampy southern Louisiana's resemblance to the low-lying Netherlands, where industrious farmers had reclaimed millions of acres for farming. While this revenue ruling does not squarely set forth respondent's position on the facts of this case because in the ruling the carbon dioxide was not produced from an oil and gas well, the ruling directly states respondent's reading of section 613A as applying only to hydrocarbon fuels and of section 613(b)(7) as applying only to minerals not expressly provided for elsewhere in subsection (b). Rec. As if to bear out this description, LL&E's mining operation lost $7.8 million in 1977 and $6.6 million in 1978. to a substantial portion of the, New Orleans metropolitan Nevertheless, the company budgeted $200 million for capital and exploration and continued to drill in the Gulf of Mexico, Madden Field in Wyoming, the gas-rich Anadarko Basin of Western Oklahoma, the North Sea, southeastern Alberta, and Columbia, where it was garnering positive results from a drilling program begun in 1978. Rec. The natural gas is then transported through natural gas pipelines for use by petitioner or sale to Florida Gas Transmission Co. pursuant to a long-term gas purchase contract dated November 15, 1971. ; Shamrock Oil & Gas Corp. v. Commissioner, 35 T.C. Timken hoped to lease the land to fur trappers. Katrina (notably New Orleans) in 2005. Hydrogen sulfide, alone, or in combination with natural gas is also unsuitable for use as a fuel because the combustion of hydrogen sulfide produces sulphur dioxide, a toxic substance subject to control under Federal pollution standards. Of the company's 225 million barrels of oil equivalent reserves, nearly 60 percent are garnered from domestic sources. and a .03 percent Louisiana Tourism Promotion District sales (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. Second, percentage depletion is permitted for so much of a taxpayer's "average daily production" of domestic crude oil or natural gas as does not exceed the taxpayer's "depletable oil quantity" or "depletable natural gas quantity." 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. 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? Phillips, however, remained committed to Copper Range. v. 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. 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. 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. In the early 1980s, industry economics changed LL&E's fortunes. Although this Court will disregard a stipulation that is plainly contrary to the facts (Jasionowski v. Commissioner, 66 T.C. A 1915 hurricane destroyed many of the levees that Wisner had constructed. WebThe Louisiana Land And Exploration Company LLC 806 Bayoo Black Drive Houma, LA Visit Website Categorized under Oil and Gas Producers Apache Louisiana Minerals LLC 1913 La 121 Cong. 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 7807. 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. Construction began on a new catalytic reformer that would provide more highly valued refined products. In 1964 the company reported profits of $32.1 million on sales of $64.1 million. We aim to provide a wide range of injection molding services and products ranging from complete molding project management customized to your needs. There is no question that there are no particular gas reserves governed by warranty contracts entered into by Texaco. Louisiana. At that time, the lodge housed 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. WebLouisiana Land & Exploration Co LLC/The - Company Profile and News - Bloomberg Markets Bloomberg Connecting decision makers to a dynamic network of information, people and Park, Poverty Point National Monument at All the gas involved in this dispute is being used by Texaco to service warranty contracts Texaco entered into with intrastate industrial consumers prior to 1978, when the NGPA was enacted. Respondent's position, although technically viable, is supported neither by legislative history nor by common usage of the term "natural gas." 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. 1763, then to the USA in 1783; W region acquired by the USA in the Subsection (e)(2) defines "natural gas" as "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." 1885). Foreign reserves are located in the U.K. and Dutch sectors of the North Sea, Canada, and Columbia. 121 Cong. In addition to Texaco, which was still its major leaseholder, LL&E secured royalty agreements with Phillips Petroleum Co., Stanolind Oil & Gas Co., Alder Oil Co., and Plymouth Oil Co., among others. There are generally two types of marketing contracts for the sale of gas. During the 1950s, CEO Robert M. Youngs began investing in working interest wells. 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. Only subparagraph (B) includes the words "minerals from." After processing, the crude oil is classified as sweet rather than sour oil. In 1981 earnings fell to $145.2 million despite revenues of almost $1,277.5 million. 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. In 1980, LL E earned profits of 180.2 million dollars or $4.74 per share. 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. And when we're finished we don't own the computer or have the people on our permanent payroll. The primary products from the Jay Field wells and processing facilities have been oil and natural gas. Contact Information Website lle.com Ownership 1.613-3(a), Income Tax Regs. It continued, however, with its policy of contracting other firms to perform seismic surveys and other exploration and development tasks. He added, however, "we are now talking about onepetroleumwhich is the most important of all energy items at this time." The amine solution absorbs the hydrogen sulfide and carbon dioxide and natural gas flow out of the top of the contactor. WebIn 1988, the company was formed to own the resource assets of Burlington Northern Railroad. Petitioners extracted four categories of products from the Jay Field wells: liquid hydrocarbons, gaseous hydrocarbons, nonhydrocarbon gases, and nonhydrocarbon liquids.2. 121 Cong. Milling, Benson, Woodward, Hillyer, Pierson & Miller, Charles D. Marshall, Jr.. 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. Louisiana Land & Exploration Co. is a corporation lessee based in New Orleans, Louisiana for 11 oil and gas leases8 are authorized and 2 are closed. Not satisfied? Hydrocarbons are organic compounds containing only hydrogen and carbon and are most commonly used as fuels. pelts, especially muskrat; second only to Texas in oil and natural 4611 (1975) (remarks of Representative Green); 121 Cong. We reject LL & E's contention that it has proven by affidavit that the gas could at all times have been sold at the Section 109 ceiling price, thereby establishing its value for royalty purposes under the leases. The brine water is reinjected into the well. 6903 (1975) (statement of Senator Bentsen). Sec. Products; Resources; My Account; Talk to a D&B Advisor 1-800-280-0780. Business Directory. Senator Hollings, a cosponsor of the amendment, added that "not one of those minerals [for which the depletion allowance was retained] has had a four-fold increase in price" as oil and natural gas had in the early 1970's. 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. Section 611(a) allows as a deduction in computing taxable income from natural resources a reasonable allowance for depletion. See 121 Cong. No damages have yet been proven, and indeed, the partial summary judgment would be proper even if none are ever established. The liquid hydrocarbon produced from the Jay Field wells is crude oil, which consists of hydrocarbon compounds that are in a liquid phase at ambient temperature and pressure. As a result of floor amendments by Senators Kennedy, Hollings, Bentsen, and others, however, the final bill included a provision eliminating percentage depletion for oil and gas wells with certain exceptions primarily for the benefit of small producers and royalty owners. 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. The company was incorporated in 2010 and is based in New Orleans, Louisiana. While entities may have multiple locations, this is based on the address registered for the lease. Specifically, subparagraph (C) does not state "minerals from oil and gas wells.". The eleven leases involved here generally call for royalty payments based on the value of the gas produced. 613A(c)(4). In 1943, for instance, LL&E employed only 24 people, yet earned $1.8 million on sales of $3.4 million. The Tax Reduction Act of 1975, Pub. The capital stock of LL E is registered with the Securities and Exchange Commission ("SEC") and is traded on the New York Stock Exchange. Petitioners contend that section 613 and section 613A are mutually exclusive and thus whatever is depletable under section 613 is not depletable under section 613A. In no case shall the allowance for depletion under section 611 be less than it would be if computed without reference to this section. 7295. 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%). These could be different entities opperating out of the same locationlike a shared office space, PO Box, or family homeor one entity with multiple lease ID numbers. In 1989 the Department of Interior recognized this effort and awarded LL&E its Conservation Award for Respecting the Environment. Sulphur is depletable pursuant to section 613(b)(1) and not section 613(b)(7). Finally, respondent's interpretation of section 613A conflicts with normal usage of the term "natural gas" as meaning fuel. 979 (1961), affd. The court found that because of the flexibility of the warranty contracts, even though the gas may have been economically committed to these customers, it was not "subject to" any contract, and therefore was governed by Section 109 rather than Section 105. The data are dynamic and may change over time. WebThe Louisiana Land and Exploration Company Law Practice New Orleans, Louisiana 10 followers "The 1970's * * * brought about an abrupt redirection in the Nation's energy policy. 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. United States v. American Trucking Association, 310 U.S. 534, 543 (1940). Accordingly, we affirm the partial summary judgment granted by the district court and remand the case for a determination of damages. The typical well stream in the Jay Field contains approximately 8.5 percent hydrogen sulfide and 2.2 percent carbon dioxide. During these years, LL&E did virtually no operating of its oil projects. Hydrogen sulfide is never used as a fuel and is not sold under long-term fixed price contracts. These diversification adventures were possible in part because of high profits in the oil industry. 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. Field / Formation: GOLDEN MEADOW / THE LA LAND & EXPLORATION CO M 001: Well Status: DRY AND PLUGGED: Well Type: Township Range Section: 19S 22E 039: Derrick Elevation: Members Only: Kelly Bushing Elevation: area, List of school districts in Information hosted on The Drillings is based on publicly available data through the Bureau of Land Management. (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. This released acreage amounted to approximately 557,000 acres. The diagram on the facing page summarizes the sour production processing system used at the Jay Field Wells. WebSuperior Performance Oil And Gas Exploration Service 122 Youngsville Hwy Lafayette, LA 70508 7801 (remarks of Senator Bartlett) (criticizing amendment for altering percentage depletion only for oil and gas industry); 121 Cong. The sour gas streams from the separation system and the oil stabilization system, containing both natural gas and hydrogen sulfide, are combined and further treated in the acid gas removal system. The early 1960s proved very successful for LL&E. WebThe La Land & Exploration Co M 001: API No. The separated natural gas is processed further in another contactor which removes water vapor from the gas stream. As for the other genuine issues of fact which Texaco claims should prevent summary judgment herein, we find that they also relate solely to damages rather than to liability. 30292-85, 37799-85, 47753-86. It also sought to expand riskier but potentially more lucrative foreign exploration. originally applied to the entire Mississippi R basin, claimed for Natural hazards may or may not be depicted on the data and maps, and land users should exercise due caution. 4, 972.) 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. When we have a project we'll go to Houston, rent a computer and run it through. The LL & E leases require Texaco to pay royalties based upon a percentage of the value of the gas produced. 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. 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. Louisiana Land & Exploration Co. is a corporation applicant based in New Orleans, Louisiana for 66 closed leases. Section 613A(e)(1) defines "crude oil" as including "a natural gas liquid recovered from a gas well in lease separators or field facilities." those by Henry production; foods, clay, glass, transportation equipment; tourism In the early 1970s, however, its Louisiana reserves began their natural decline. Respondent thus concludes that we should not allow percentage depletion for sulphur derived from hydrogen sulfide. 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. As LL&E operations grew, both sales and revenues increased. 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. ", But while Graham focused on controlling costs, he, like other CEOs of that era, also sought profits in new businesses. and the applicable percentage (determined in accordance with the table contained in paragraph (5)) shall be deemed to be specified in subsection (b) of section 613 for purposes of subsection (a) of that section. Much of the land was eventually taken over by a group of midwesterners led by Henry Timken, who owned an Ohio ball bearing company. 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. Respondent thus argues that because the sulphur in issue is a product of oil and gas wells, it loses its section 613 depletion allowance. Its industrial outputs include chemical products, Claus sulphur recovery plants, however, were not economically attractive investments until the value of sulphur began to rise significantly in the 1960's. Following respondent's reasoning, "natural gas" for purposes of section 613A means any product extracted from an oil and gas well in a gaseous state. 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 121 Cong. 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. Sec. Rec. (1) CRUDE OIL.The term "crude oil" includes a natural gas liquid recovered from a gas well in lease separators or field facilities. L. 69-20, sec. LL&E is a Maryland corporation having its principal office at New Orleans, Louisiana. 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. In 1987 the company began to acquire newly opened low cost leases in the shallow waters of the Gulf of Mexico. The sulphur is then condensed and stored until sold. The Claus system chemically converts more than 96 percent of the hydrogen sulfide into elemental sulphur. LA. Sec. In 1975 the company opened a small refinery in Mobile, Alabama, to process 30,000 barrels a day of Jay Field crude. See Black's Law Dictionary 1278 (5th Ed.1979). The property has been operated as a hunting lodge since the 1960s. Lease No. Petitioners are calendar year, accrual method taxpayers. Texaco's argument is based upon isolating the term "sold under" in subsection (a) of Section 105, rather than reading the Section as a whole to determine its meaning. oil and natural gas were discovered; capital, Baton Rouge; other 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. LOUISIANAS MOST CAPTIVATING HUNTING LODGE & WILDLIFE RESERVE. Click on the case name to see the full text of the citing case. Docket Nos. 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. and paper industry; highly productive in agriculture; soybeans, In 1971 revenues from working interests exceeded those from royalty interests for the first time. on the history of New Orleans (q.v. 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. The LOUISIANA LAND AND EXPLORATION COMPANY and its Licensors The following June a wholly owned subsidiary of LL&E, the Sun Fire Coal Company, began to develop an underground mine near Hazard, Kentucky. We agree with the district court that Section 109 applies. These moves strengthened LL&E's overall position, but plunging oil prices and the Copper Range charge took their toll. (162m/532ft); vast coastal areas of marsh, lagoon, and Select a reason Rate this page Send feedback UBS flags buyback possibility after Second-quarter earnings beat 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 company continued to look for new sources of oil and in October 1972 newly named CEO John G. Phillips announced a $75 million offering to finance a new subsidiary, Louisiana Land Offshore Exploration Co. (Lloxy), that would explore for oil and gas in the Gulf of Mexico. Mascrier), Fr. This uncontradicted and consistent legislative record, therefore, reveals that Congress was concerned only with oil and gas when it approved section 613A. A second issue is whether the partial summary judgement was procedurally appropriate in this situation. The goal of the legislation was to eliminate what was perceived to be an unneeded tax incentive only for the major integrated oil companies. Rightor and John Kendall Smith. divided into 64 parishes (the only state to use this term for its Gayle Land Exploration Co specializes in Oil And Gas Exploration Services. 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. 7295-7296 (1975). But while business was very good in the late 1970s there were doubts about LL&E's future. William M. Linden, Ewing Werlein, Jr., Christine L. Vaughn, John W. Leggett, and Elaine Drodge Koch, for the petitioners. WebDetails for well Sweet Lake Land And Oil Co 001 | API # 17-023-20688 | operated by McMoran Exploration Company in Cameron Parish, LA. In 1930 Texaco also agreed to pay LL&E's $1.8 million funded indebtedness. 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. The sales Caspary's charges had some legitimacy. (e) DEFINITIONS.For purposes of this section. 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. After reviewing the law and the facts, we find that the district court was correct in its determination. Rec. Rule 91(e), Tax Court Rules of Practice and Procedure. 613A(e)(2). WebArising under the 2006 version of La. (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. 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. WebThe Louisiana Land and Exploration Company Overview. v. In Rev. 7239 (remarks of Senator Hollings). cattle, sugarcane, poultry and eggs, dairy products, and Lease No. 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. In addition, in December 1976 LL&E acquired the Warrior River Coal Company, owners of a small surface mine in Tuscaloosa, Alabama. 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. In 1965 LL&E had only 145 employees. The depletable oil quantity is measured in barrels. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT, United States Tax Court.https://leagle.com/images/logo.png. The well effluent from the Jay Field wells is treated in facilities adjacent to the wells. Wisner's plans, however, were thwarted by southern Louisiana's severe weather. In 1984, large additions and renovations were made to the lodge, increasing the size of the camp to accommodate more guests. 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. For example, we don't hesitate to use consultants. WebLouisiana Land & Exploration Co. PO Box 60350 New Orleans , Louisiana 70160 Louisiana Land & Exploration Co. is a corporation lessee based in New Orleans, Louisiana for 11 oil Preserve, headquartered in New Orleans, with units in Congress responded to this public outcry by repealing the percentage depletion allowance as applied to the major integrated oil companies.". 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. the first historian of Louisiana with his.
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