Received 2025 property tax assessments for 8 mineral interests in Washington county. 6 of 8 had 20% increases in assessed value despite reductions in production and oil prices in 2024. 4 of these wells extend into Fayette county where the 2025 assessed value decreased. Washington county is using a new contract appraiser, Capitol Appraisal Group, this year. Have others had similar increases in 2025 assessments? Has anyone had success in protesting recently.
I’ve experienced the same thing. (Washington,Lee,Fayette) I just inherited these, so am not sure of history. The division orders I signed show new co-op that only crossed into my area of interest because of required offset of 1 of the well bores. Thunder creek H0 2 ,4,6. Would your interest perhaps be in these, thereby the assessment increase. If it is, let’s stay in touch and share info. Thank You
My wells are not those.
Your notice should have a password for cagi site to log-in with your owner number. You can pull down the individual workpaper for each well to see how the wells are valued. Save these and the scanned notice of appraisal value in a folder on your computer. Factors are (1) monthly average oil and gas price in 2024; (2) end of year volumes; (3) decline curve based on estimated economic life and (4) your DOI. You can notify CAGI if the average price is high or your DOI is wrong. The economic life is the expected number of years that the operator will produce from the well before shutting in because it is losing money. The longer the economic life, the higher the well value. Most likely the increase is because the economic life is long (eg 25-30 years vs 3-4 years) and that needs to be protested by the operator. Or perhaps monthly volumes increased in 2024 because the well was repaired or stimulated by nearby frac. Compare to the prior year economic life if you saved those workpapers and compare to the economic life used by the Fayette County appraiser. If the operator gets the economic life reduced, then the well value will be reduced for mineral owners as well.
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Thanks for the information. I will ask Magnolia if they are protesting the economic life.
I protested last year in Caldwell County with Capitol and had some success in reducing my value. Because those wells cross county lines, you should protest them and show the appraiser the values from both sides. I haven’t dealt with this issue in several years so my memory is a bit fuzzy, but I think generally the county with the larger portion of the well may have ability to set the value for both counties when disputed. As in, the county with the larger share can dictate how the smaller county values it, assuming both counties are protested.
Last year was the first time I’ve ever protested and I thought it was pretty easy. The appraiser was courteous and provided good detail and explanation. I didn’t get it lowered as much as I had hoped, but I wasn’t disappointed with the outcome. I handled everything through their portal and email. I submitted some basic reports of year over year production and prices.
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There is a group called CRA Advisors that handles mineral property tax protests but primarily for larger mineral owners across Texas. If the value is substantial enough, it might be worth reaching out to see if it is a fit.
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It is great to watch the appraisal value and work with the appraisal company for reduction. Any reduction will be applied across the board to all royalty owners in the well, as each one owns a fraction of the same property. A difference from protesting a house where you own 100%.
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About 12 or more year’s ago there were wells brought into production that were taxed in Houston County, Texas that were valued at a negative value. The mineral owners were being tax more than what was being produced by a lot before it was corrected. An outside firm did the appraising!
Mineral appraisals are done by independent companies because counties do not have engineering expertise to determine the declines and other data required by Texas statutes. In very different from real property appraisal. Errors can happen, particularly when Texas Comptroller sales data has problems, or units cross county lines and the value needs to be apportioned between the counties (that requires an agreement between the 2 county appraisers) or the royalty DOI is a larger tract decimal and not a smaller unit decimal. This is why mineral owners need to pull the detailed work papers and review the basis figures including the royalty decimal.
I have the same problem with my proposed taxes for my interest in the Tater-Tiger (Magnolia) wells in Washington County. Their projections are way over the amount I’ll be paid this year? I was planning on protesting but got too busy with family vacation and missed the deadline.
I had printed out my previous statements that l got from enverus(energylink), and was going to
project the rest of this year with the monthly
average. Hopefully some of the others protested. I don’t mind paying taxes but don’t like paying taxes on income l won’t get.
The taxable value is not your estimated annual royalties. It is the present value of your future royalties, I.e. the discounted ultimate cash flow from the well. It is meant as an estimate of what the sales price you would expect if you sold the minerals. Just as you are taxed on the sales value of your house.
Thanks for explaining how the county taxes royalties. I didn’t understand how they came up with a value.