Oil & Gas

Producing Oil and Gas Leaseholds and Lands

Colorado Statute requires the Assessor to value oil & gas equipment, associated pipelines, drilling rigs and production for taxation purposes.

The equipment, pipelines and drilling rigs are valued using the three approaches to value: cost, market and income.

Valuation of producing oil or gas leaseholds and lands is 87.5% of the net taxable revenues realized by the taxpayer for the sale of oil or gas sold or transported from the lease during the preceding calendar year.

The leasehold value of the wellsite is equivalent to 100% of the interests in the well including all taxable royalty and working interests.  There are not separate valuations for each interest in the well, the operator of the well receives the valuation and bills each individual interest owner their portion of any taxes.

Producing severed mineral interests are valued as part of the leasehold, but can be placed on the tax roll.  For information on this as well as the valuation procedures for nonproducing severed mineral interests refer to Severed Mineral Interests.

Resources

Colorado Oil & Gas Conservation Commission (COGCC)
Access production and well information

Declaration Forms
GIS

Severed Mineral Interests

Severed minerals are separate ownerships of minerals in place and do not include surface land.

Pursuant to 39-1-104.5, mineral interests will only be placed on all tax roll if the owner provides proof of ownership and the record  of creation of the severed mineral interest.  This shall be provided in the form of a certificate prepared by an attorney, a title insurance company or a title insurance agent authorized to do business in this state.

If the mineral interest is producing, it will be valued with the well.  If it is nonproducing, a separate value will be determined according to Colorado statutes.