State works to formalize method for assessing oil and gas properties

  • Nabors drilling rigs sit idle at Prudhoe Bay in this May 25, 2017 photo. State regulators are working to finalize the method for assessing oil and gas properties for tax value that they have been using for the past several years. The new regulations apply to all oil and gas properties other than the Trans-Alaska Pipeline System. (Photo/Michael Dinneen/For the Journal)

Some of the affected parties are raising concerns as state tax assessors are finalizing a methodology for valuing oil and gas properties other than the Trans-Alaska Pipeline System for the first time.

Alaska Petroleum Property Assessor Jim Greeley said in an interview that the way the state currently assess values for oil and gas properties isn’t new; it’s been phased in over the last five years.

However, the means for assessing the industry’s often complex and extremely expensive infrastructure has never been spelled out in state regulations, according to Greeley.

“The regulation provides only high-level, broad guidance that basically says for production properties you have to use replacement cost (valuation),” he said. “Then for pipelines it says you can use sales, income or replacement cost and it stops there so there’s no specifics of methodology in currently. That’s what we’re trying to fix.”

Read more at the Alaska Journal of Commerce.

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