Wyoming Administrative Code › Agency 011 - Revenue Dept › Sub-Agency 0005 - Mineral Tax › Chapter 6 - AD VALOREM AND SEVERANCE TAXES ON MINERAL PRODUCTION › Section 6-4b - Definitions - Oil and Gas

Current through July 13, 2024
(a) "Lease
				condensate" means liquid hydrocarbons which are separated from other components
				of the production stream on the lease or before the inlet to a natural gas
				processing facility. Lease condensate is oil for severance and gross products
				tax reporting purposes.
(b) "Plant
				condensate" means liquid hydrocarbons which are separated from other components
				of the production stream beyond the inlet of a gas processing facility. Plant
				condensate is a natural gas plant product for severance and gross products tax
				purposes.
(c) "Barrel" means 42
				(U.S.) gallons measured at 60 degrees Fahrenheit at atmospheric
				pressure.
(d) "Cubic foot" of gas
				means the volume of gas contained in one cubic foot of space at a pressure of
				14.73 pounds "per square inch absolute" (psia) and at a temperature of 60
				degrees Fahrenheit. (Generally stated as Mcf (1000 cubic feet)).
(e) "Working interest" means any interest in
				a well or group of wells which is burdened by the cost of exploration for
				minerals on, the development of, or the production of minerals from the well or
				group of wells.
(f) "Non-working
				interest" means any interest which is not burdened by the cost of exploration,
				development, or the production of minerals from a property. This type of
				interest includes but is not limited to royalty interest, overriding royalty
				interest and net profits interest.
(g) "Take in kind" means the event when an
				election is made by an interest owner under lease or joint operating agreement,
				with notice to the affected parties, to separately market or dispose of crude
				oil natural gas or natural gas products. An interest owner must affirmatively
				exercise an option under a lease or operating agreement to separately market
				his share of the production to qualify as take in kind. If an option to
				separately market is not exercised by the interest owner, the operator shall
				report the interest owner's portion of the production. The phrase "take in
				kind" does not include sales under common agreement by interest owners and the
				operator where the purchases merely makes disbursements for the purchases
				directly to the parties selling their production.
(h) "Intangible drilling cost" means the
				intangible expense associated with drilling a well and preparing it for
				production. This expense includes labor, materials and supplies, drilling
				equipment costs, fuel and power, etc. and supplies, and shall be determined on
				the financial book basis of accounting as used by the taxpayer for financial
				statement purposes in accordance with generally accepted accounting
				principles.
(i) "Dry hole expense"
				means the expense associated with drilling a dry development or exploratory
				well on the producing property as determined on the financial book basis of
				accounting and used by the taxpayer for financial statement purposes, in
				accordance with generally accepted accounting principles.
(j) "Plant or facility depreciation" means
				the annual expense associated with the amortization of the capitalized cost of
				a plant or facility, calculated based on the units of production or straight
				line basis and used by the taxpayer for financial statement purposes, in
				accordance with generally accepted accounting principles.
(k) "Direct costs of producing" includes
				labor for field and production personnel whose primary responsibility is
				extraction of crude oil, lease condensate, natural gas and other mineral
				products removed from the production stream before processing; materials and
				supplies used for and during the production process; depreciation expense for
				field equipment used to take the production stream from the wellhead to the
				point of valuation; fuel, power and other utilities used for production and
				maintenance; gathering and transportation expenses from the wellhead to the
				point of valuation; ad valorem taxes on production and transportation
				equipment; intangible drilling costs, including dry hole expense; and other
				direct costs incurred prior to the point of valuation that are specifically
				attributable to producing mineral products.
(1) "Direct costs of producing, processing
				and transporting" includes the direct cost of producing determined under
				paragraph (w) of this section plus transportation and processing plant or
				facility labor whose primary purpose is transporting or processing crude oil,
				plant condensate, natural gas and other mineral products removed from the
				production stream; materials and supplies used for transporting and processing;
				depreciation expense for equipment used for transportation and processing;
				fuel, power and other utilities used for transportation and processing and
				maintenance of the transporting and processing plant or facilities;
				transportation from the point of valuation to the processing plant or facility
				to the extent included in the price and provided by the producer; ad valorem
				taxes on the transporting equipment and processing plant or facility; and any
				other direct costs incurred that are specifically attributable to the
				transporting or processing of mineral products contained in the production
				stream.