The appraisal districts have up to five years to add wells to the tax rolls, if they failed to do so in the years previous.
Apache would be the operator. Definitely horizontal. These wells are in block 71, section 31 and 32 - ours are Ash and Birch Units. I am sure changes in the market prompted them to not follow through on drilling the seventh well they had planned for on our property. That well was supposed to have been drilled in April. I will check with the major owner of our group (we have 25 percent, he has 50 percent and is the lead for contact) and see if he can find out if Apache has appealed valuation. We were caught off-guard by the notices thinking these taxes were part of the monies paid to the county in our royalty payments.
They certainly did - 2016 to 2019!
There was a presentation at the NARO conference in Big Spring that will be repeated at the convention on how mineral property taxes work and how to protest them. My experience has been: 1) go straight to the contractor they use for minerals. The local CAD office is of no help on minerals. 2) The main things to protest are wrong RI listed or wells that came online late in the year and then tailed off quickly. Other than those two items, mineral protests are pretty hard.
I contacted the appraisal group Reeves County Appraisal District uses. Trent was definitely prompt to respond and provided details. In my mind the appraisal looks like an income tax (I know it is not, but it has the feel of one in my simple mind). He did offer this comment: “I do want to be clear that this is not an income tax, so the proposed value on your leases is not what I expect you to make this year. The value is what they could be sold for if you were to want to do so. Just like your home or anything else, I have to put a market value on it. This value is going to be 3-5 times higher than what you generate in income on a given year.”
This is an update to my original post regarding appraised values in Reeves County. I protested the valuation on the Reeves County form by checking “incorrect value”. I also tried several times to contact Capitol Appraisal Group with limited results. Subsequently I contacted the operator regarding their Working Interest Value, if they had protested their appraisal and what, if any, resolution they had received.
I received an email today indicating their tax attorney had been involved in discussions with Capitol regarding the appraisal and the steep decline rate of the well during the first 6-7 months. Capitol reviewed the decline numbers and the value was reassessed and lowered about 30% from the initial appraisal.
Using the operator’s revised appraisal numbers, Capitol reduced my appraisal about 27%. In my opinion the new value still seems high, but it is definitely an improvement.
Thanks. You are correct about the Reeves CAD, no help at all, but their contractor didn’t call me back either. Not trying to protest at this point but I need to find out how much of the royalties should be held back for County mineral taxes. You happen to know the tax rate, or rule of thumb?