From the pages of
Sublette Examiner
Volume 4, Number 7 - May 13, 2004
brought to you online by Pinedale Online

County moves to intervene in ExxonMobil case

by Cat Urbigkit

After conferring in executive session with attorney John McKinley, then coming back into open session with McKinley still on the speaker telephone, the Sublette County Commission voted Friday to intervene in an ExxonMobil tax matter before the Wyoming Board of Equalization.

The case involves ExxonMobil's appeal of the valuation of sweet gas produced in Sublette County for production years 1997 through 1999. McKinley reported that ExxonMobil valued the gas using the area index pricing methodology. But when the Department of Audit, at the Department of Revenue's request, examined ExxonMobil's report, the agency determined the valuation reported by ExxonMobil was incorrect, McKinley told the commission.

DOA determined using a weighed average, third party resale price that received by Duke Energy to determine fair market value

"That was the price apparently that the Department of Audit determined that ExxonMobil actually received for the gas," McKinley said.

The resulting difference calls for a preliminary increase of $1.5 million in ad valorem taxable value and an additional $181,000 in severance taxes, and a similar amount in ad valorem taxes due, according to DOR, McKinley said.

Exxon appealed DOR's decision to the BOE.

McKinley reminded the commission that the valuation and reporting issues in the case are the same types of issues the county was unable to pursue in its earlier dispute with Exxon's sour gas production, because the county has no audit authority.

"But these are the types of issues where the Department of Audit is looking at, whether the price reported is actually the value of the produce, or the price received by the company," McKinley explained.

The commission was faced with the choice to either sit back and monitor the case, or intervene, ensuring that the DOR and Exxon won't come to a settlement agreement without the county's involvement. The commission directed McKinley's firm to take action to have the county intervene in the case to defend the DOR's position.

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