Howard County, TX - Oil & Gas Discussion archives


Thank you.


Any suggestions for a CPA to talk with about tax consequences when selling mineral rights? My mineral rights are in Howard County, but I live in San Angelo. I do go to Big Spring periodically.


It really does not matter where the CPA is located. Use whoever you feel comfortable with. You will need to know what the basis was when you acquired the interest.


I need help with determining the basis. I inherited and don't know the value at that time (2002). I figured a CPA could help me with that.. ?


Barbara, a CPA may be able to help, but he/she would need to have knowledge of the oil and gas business in order to accurately evaluate everything. I suggest locating a mineral appraisal company, they should be well-suited to do this for you. Then, you provide their valuation to your CPA and he can take care of the rest.


Right.. thanks.. That is why I thought I would ask here. Maybe there was a CPA that specialized in oil & gas and could get this information for me.. But I will check into it more. Thanks


Barbara, have you leased these minerals before? If you leased them in the 2002 timeframe, a rule of thumb that can be used for a valuation is the lease bonus per acre that was received in 2002, multiplied by 3-4 times. This obviously isn't an exact science but it will get you in the ballpark. If I remember correctly, the IRS only requires someone with a knowledge of valuation, to value the minerals. This could be a landman, or even a mineral buyer. Check with a CPA on this, but it shouldn't cost you much to get a valuation.


Thanks for the response! I have leased some of it, but not all. Some is producing now but not much.


Barbara, most CPAs, even ones who specialize in clients with O&G interests (and there's a very good one in Angelo, if you want a reference), typically don't do valuations as they lack the software or expertise necessary to run decline curves on production. You need to go to an appraiser for that. That said, if your minerals were not producing at the time of your inheritance, your basis is zero--or whatever nominal value you choose to assign to them, if you want to play it extra safe, say $100 an acre. I've done dozens of valuations for non-producing minerals at zero basis. With one exception. I agree with Texas Owner below: if you leased it within a year of your inheritance, you ought to value at 3--4 times your bonus, just to be on the safe side.


Hi Barbara, We hired a woman by the name of Michele Mudrone (who is experienced in the O&G industry) to write a report for us. I've included her contact information below. She was great to work with and also very reasonably priced. I've included her contact information below for your reference.

Michele K. Mudrone, P.E.
MKM Engineering


Thanks Brandi! I was just in Plano over the weekend..


Not yet, Russell. In the adjacent section to your east SM Energy has drilled and completed 3 horizontal wells named the Griswolds and there are 3 Papagiorgio horizontal wells in the adjacent section to your north. I think all of those wells are mentioned in SM's most recent investor presentation. It's probably just a matter of time.


where is section 45 blk 32 in relationship to big spring and I 20? have minerals in section 5 and 45 ese of big spring. thanks.


I-20 runs through section 45 and is right on the east side of Big Spring.


Thanks Marcus. our family has minerals in 5 and 45...below I-20. Encana and Hannahthon leased from us a year or so ago. Hopefully they're drilling! have not heard in a while. again, thanks


What is the term "Plugged oil well" mean? Is it well drilled and no oil was found or a well was drilled and there was oil but is not going to be pumped.

I see a lot of plugged wells.


Plugged well can mean many things. It can be a well that was drilled that found no oil or gas or non commercial quantities of oil or gas and was therefore plugged and abandoned. It can also mean a well that produced oil or gas until it was depleted and then the operator plugged and abandoned the well.


Any updates on sec. 36 blk. 31 2tn Howard county...


Michael, they are getting closer. There are permitted horizontal wells in Section 9 and 4 to the southwest of you and Section 3 and 38 to the west of you.


Correction. I meant southeast and east.