Mr. Erik Milito - The House Committee on Natural Resources ...

5.4
State Severance and Ad Valorem Taxes
January 2012
Oil and gas production values were calculated by applying price projections provided by the Economist Intelligence Unit to
the production forecasts in Tables 1, 2, and 3.
Severance and Ad Valorem Rate (IFC)
2011
2012
2013
2014
2015
Oil
(US $ / bbl)
98.70
95.40
90.90
85.90
83.80
Natural Gas
(US $ / mcf)
4.54
5.26
5.70
6.18
6.69
NGL price projections use 2010 propane prices as a baseline and are assumed to change from year to year at the same
rate as natural gas prices.
Severance and ad valorem taxes are calculated by applying these values to the severance and ad valorem tax rates
reported by ICF and shown below.
Severance and Ad Valorem Rate (IFC)
Colorado
Montana
New Mexico
North Dakota
Utah
Wyoming
2.85 %
8.61 %
7.89 %
7.07 %
2.20 %
4.70 %
<strong>The</strong> results are presented in Table 9.
5.5
Federal Royalties
Oil and gas production values were calculated in the same way as for state severance and ad valorem taxes. <strong>The</strong> following
royalty rates were applied, based on the 2008/2009 royalty rate calculated from information provided by the Bureau of
Land Management.
Oil
11.7 %
Gas
12.4 %
NGLs
9.7 %
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