011-6 Wyo. Code R. § 6-4b - Definitions - Oil and Gas

(a) "Lease condensate" means liquid hydrocarbons which are separated from other components of the production stream on the lease or before the inlet to a natural gas processing facility. Lease condensate is oil for severance and gross products tax reporting purposes.

(b) "Plant condensate" means liquid hydrocarbons which are separated from other components of the production stream beyond the inlet of a gas processing facility. Plant condensate is a natural gas plant product for severance and gross products tax purposes.

(c) "Barrel" means 42 (U.S.) gallons measured at 60 degrees Fahrenheit at atmospheric pressure.

(d) "Cubic foot" of gas means the volume of gas contained in one cubic foot of space at a pressure of 14.73 pounds "per square inch absolute" (psia) and at a temperature of 60 degrees Fahrenheit. (Generally stated as Mcf (1000 cubic feet)).

(e) "Working interest" means any interest in a well or group of wells which is burdened by the cost of exploration for minerals on, the development of, or the production of minerals from the well or group of wells.

(f) "Non-working interest" means any interest which is not burdened by the cost of exploration, development, or the production of minerals from a property. This type of interest includes but is not limited to royalty interest, overriding royalty interest and net profits interest.

(g) "Take in kind" means the event when an election is made by an interest owner under lease or joint operating agreement, with notice to the affected parties, to separately market or dispose of crude oil natural gas or natural gas products. An interest owner must affirmatively exercise an option under a lease or operating agreement to separately market his share of the production to qualify as take in kind. If an option to separately market is not exercised by the interest owner, the operator shall report the interest owner's portion of the production. The phrase "take in kind" does not include sales under common agreement by interest owners and the operator where the purchases merely makes disbursements for the purchases directly to the parties selling their production.

(h) "Intangible drilling cost" means the intangible expense associated with drilling a well and preparing it for production. This expense includes labor, materials and supplies, drilling equipment costs, fuel and power, etc. and supplies, and shall be determined on the financial book basis of accounting as used by the taxpayer for financial statement purposes in accordance with generally accepted accounting principles.

(i) "Dry hole expense" means the expense associated with drilling a dry development or exploratory well on the producing property as determined on the financial book basis of accounting and used by the taxpayer for financial statement purposes, in accordance with generally accepted accounting principles.

(j) "Plant or facility depreciation" means the annual expense associated with the amortization of the capitalized cost of a plant or facility, calculated based on the units of production or straight line basis and used by the taxpayer for financial statement purposes, in accordance with generally accepted accounting principles.

(k) "Direct costs of producing" includes labor for field and production personnel whose primary responsibility is extraction of crude oil, lease condensate, natural gas and other mineral products removed from the production stream before processing; materials and supplies used for and during the production process; depreciation expense for field equipment used to take the production stream from the wellhead to the point of valuation; fuel, power and other utilities used for production and maintenance; gathering and transportation expenses from the wellhead to the point of valuation; ad valorem taxes on production and transportation equipment; intangible drilling costs, including dry hole expense; and other direct costs incurred prior to the point of valuation that are specifically attributable to producing mineral products.

(1) "Direct costs of producing, processing and transporting" includes the direct cost of producing determined under paragraph (w) of this section plus transportation and processing plant or facility labor whose primary purpose is transporting or processing crude oil, plant condensate, natural gas and other mineral products removed from the production stream; materials and supplies used for transporting and processing; depreciation expense for equipment used for transportation and processing; fuel, power and other utilities used for transportation and processing and maintenance of the transporting and processing plant or facilities; transportation from the point of valuation to the processing plant or facility to the extent included in the price and provided by the producer; ad valorem taxes on the transporting equipment and processing plant or facility; and any other direct costs incurred that are specifically attributable to the transporting or processing of mineral products contained in the production stream.

Notes

011-6 Wyo. Code R. § 6-4b