The appraisal districts have up to five years to add wells to the tax rolls, if they failed to do so in the years previous.
Apache would be the operator. Definitely horizontal. These wells are in block 71, section 31 and 32 - ours are Ash and Birch Units. I am sure changes in the market prompted them to not follow through on drilling the seventh well they had planned for on our property. That well was supposed to have been drilled in April. I will check with the major owner of our group (we have 25 percent, he has 50 percent and is the lead for contact) and see if he can find out if Apache has appealed valuation. We were caught off-guard by the notices thinking these taxes were part of the monies paid to the county in our royalty payments.
They certainly did - 2016 to 2019!
There was a presentation at the NARO conference in Big Spring that will be repeated at the convention on how mineral property taxes work and how to protest them. My experience has been: 1) go straight to the contractor they use for minerals. The local CAD office is of no help on minerals. 2) The main things to protest are wrong RI listed or wells that came online late in the year and then tailed off quickly. Other than those two items, mineral protests are pretty hard.
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I contacted the appraisal group Reeves County Appraisal District uses. Trent was definitely prompt to respond and provided details. In my mind the appraisal looks like an income tax (I know it is not, but it has the feel of one in my simple mind). He did offer this comment: “I do want to be clear that this is not an income tax, so the proposed value on your leases is not what I expect you to make this year. The value is what they could be sold for if you were to want to do so. Just like your home or anything else, I have to put a market value on it. This value is going to be 3-5 times higher than what you generate in income on a given year.”
This is an update to my original post regarding appraised values in Reeves County. I protested the valuation on the Reeves County form by checking “incorrect value”. I also tried several times to contact Capitol Appraisal Group with limited results. Subsequently I contacted the operator regarding their Working Interest Value, if they had protested their appraisal and what, if any, resolution they had received.
I received an email today indicating their tax attorney had been involved in discussions with Capitol regarding the appraisal and the steep decline rate of the well during the first 6-7 months. Capitol reviewed the decline numbers and the value was reassessed and lowered about 30% from the initial appraisal.
Using the operator’s revised appraisal numbers, Capitol reduced my appraisal about 27%. In my opinion the new value still seems high, but it is definitely an improvement.
Thanks. You are correct about the Reeves CAD, no help at all, but their contractor didn’t call me back either. Not trying to protest at this point but I need to find out how much of the royalties should be held back for County mineral taxes. You happen to know the tax rate, or rule of thumb?
FYI, Reeves told me (January 2021) they no longer outsource valuation to Capitol Group, Reeves County Appraisal Dept now conducts minerals valuations in-house.
This is correct and it has been a disaster. We have gotten about 20% of the bills we should. Names not spelled correctly, missing suite numbers, zip codes wrong, and many large wells showing $0 values. Whoever thought it was a good idea for Reeves CAD, one of the worst in the state to begin with, to bring their mineral appraisals in house, should resign immediately.
We are experiencing that the problem lies with the Reeves Tax office which did not send out all the bills and seems to have now doubled some entries and activated plugged wells. Apparently the tax office (not CAD) uses an outside-provided program company. There are communication issued with both Reeves CAD and with Ward County data
@TennisDaze, The CAD told me it was their fault the addresses were wrong. A clerk inputting them apparently made the errors. Also, the $0 values on wells apparently originated with the CAD.
On the other hand, the Tax Office apparently has done nothing about the multitude of mailed statements they had returned for zip codes showing 00000 in the address.
I sent a detailed letter correcting the names and addresses for six partnerships to both 2 weeks ago and have yet to receive missing statements and they have not been corrected in the system. I have resorted to doing searches on the website and paying the missing statements.
It would seem someone in Reeves County would be noticing their massive revenue shortfall by now. I assume we will be getting supplemental tax bills with 10 days to pay them for most of this year as they straighten this out.
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I inquired about the zeroed out wells on my my mom’s estate (now mine and my brothers) well back in the tax process and was told that was correct. We have two of seven wells that were not zeroed out. Can’t imagine going with amended tax statements.
Looking at my Reeves County appraisal form, which was dated May 15, 2020, I noticed I had until June 15th to appeal the valuation. As it showed “$0” as the taxable value I filed the document as out of sight and mind. So now it is possible or even likely I may receive an amended statement? If that is the case, saying the CAD is “one of the worst” in the state is certainly accurate.
I should also add that Reeves is not going to tax wells valued below $500 this year, which is a good thing. This may account for the $0 on small interests or old wells.
Reeves CAD is pretty terrible. I have been trying to visit with someone over there for two months now. My partner and I own a total of 3 surface acres of a RAL tract comprising an undivided 640 acres. Reeves CAD has attributed all surface taxes ($9,400) to us. I wish we made that per year off of the royalty…