Oil and Gas Price Escalation Factors per Property Tax Code, Section
P&A has finalized the
Section 23.175 calculation required to derive the oil and gas price
escalation scenarios for the 2017 tax year.
It should be noted the EIA has published a current Annual Energy Outlook (AEO)
which can be used to calculate the Price Adjustment Factors (that are a part of
the derivation of the year 1 price in our discounted cashflow appraisals of
mineral interests) referencing prices published in Tables 13 and 13. The EIA's
most recent version of their AEO can be found at
In addition, see how these factors produce P&A's
reference price forecasts for oil and gas, with a
comparison to the previous tax year's oil and gas price forecasts. The oil and
gas price forecasts for tax year 2017 are more optimistic than for the previous
tax year, particularly for oil. However, it should be noted that the valuation
of mineral interests depends on more than price alone. Forecasts of oil and gas
production and expense levels as of January 1 also figure prominently into the
calculations. Expenses levels tend to follow price movement in a lagging (less
volatile) fashion, while production tends to decline over time as a natural
result of changing reservoir conditions (pressure loss, recovery percentage,
etc.). Therefore a price difference by itself does not fully indicate how
current valuations will compare with valuations performed for any previous tax
As always, we welcome any thoughts or suggestions you have regarding our
appraisal work, etc. We are here to serve the taxpayers in the most efficient,
timely and fair manner possible.
Economic Obsolescence Appraisal Policy for Pipelines
P&A is committed to the uniform and accurate appraisal of all pipelines.
Beginning tax year 2015 we’ve instituted a new policy regarding pipelines we
appraise using the Cost Approach. Specifically, we’re amending the way we
provide for Economic Obsolescence (a form of depreciation) based on
“utilization” (throughput versus capacity of the pipeline). Although we’re
not amending the formula itself we’ve used for many years now (a variation of
the Chilton equation), we are striving for more clarity in the throughput and
capacity figures required in the formula. Please see this
throughput appraisal policy memo
for details. Thank you for your understanding
and cooperation. Please feel free to contact any of our utility appraisers
if you have any questions.
New Hyperbolic Production Forecast Feature in P&A Mineral Appraisals
We've improved our production forecast abilities by incorporating a hyperbolic
formula using parameters from Aries decline curve software. See this explanation
for more details.
Business Personal Property Renditions
are due by April 15!
Rendition statements and property reports must be delivered to the chief appraiser
after January 1 and not later than April 15, except as provided by Tax Code §22.02.
On written request by the property owner, the chief appraiser shall extend a deadline
for filing a rendition statement or property report to May 15. The chief appraiser
may further extend the deadline an additional 15 days upon good cause shown in writing
by the property owner.
Each year the comptroller and each chief appraiser shall publicize in a manner reasonably
designed to notify all property owners the requirements of the law relating to filing
rendition statements and property reports and of the availability of forms. A person
required to render property or to file a report as provided by this chapter shall
use a form that substantially complies with the appropriate form prescribed or approved
by the comptroller.
Appraisal districts are not obligated to mail rendition forms to property owners,
although many do only as a courtesy. Property owners can find and print approved
rendition forms directly from the Comptroller’s website:
Which form to use depends on the type of property being rendered. Each form requires
a property owner to furnish the information necessary to identify the property and
to determine its ownership, taxability, and situs. A property owner can (but is
not required to) furnish additional information on the form, including a good faith
estimate of value. A tax agent (but not the property owner) is required to swear
that the information provided in the rendition is true and accurate to the best
of their knowledge and belief.
Substantial tax penalties can accrue for failure to timely file a rendition or if
the property owner or agent is found to have committed fraudulent conduct in an
inspection, determination, or other proceeding before the appraisal district.
More information is available in the Texas Property Tax Code, Chapter 22 (Renditions
and Other Reports), such as what persons and which property is covered by this business
personal property rendition law.