Colorado says thousands of well production reports have not been filed

A newspaper report in Colorado says three oil and gas companies have failed to file nearly 10,000 well production reports in the past few years, a discovery made by a tax audit. But one Oklahoma City company has failed to file dozens of reports as well.

The Colorado Independent reported the well production reports are used by the state to ensure the businesses are paying their fair share in state severance taxes.

The missing well production reports were the subject of a tax audit in January that found oil and gas companies in Colorado failed to file more than 50,000 of them between 2016 and 2018.

The COGCC on Wednesday said there are about 17,373 missing reports for wells in production after accounting for about 10,000 that have been submitted since the audit. Of those missing reports, three companies — Kerr-McGee Oil & Gas Onshore LP, Noble Energy Inc., and Bonanza Creek Energy Operating Company, LLC — were responsible for 55% of them.

Oklahoma City-based SandRidge Exploration and Production LLC, according to the audit has failed to file 80 well production reports.

Kerr-McGee Oil & Gas Onshore LP, a subsidiary of Anadarko Petroleum Corporation, one of the state’s largest oil and gas drillers, is now owned by the Texas-based company Occidental Petroleum Corporation. The subsidiary topped the list, failing to file 3,942 well production reports from 2016 to 2018.

“We are confident all of our production in Colorado has been reported for tax purposes, and we will continue to work with the state to reduce any clerical error rate in the future. In the meantime, we are reviewing our records to ensure everything reported to the Colorado Oil and Gas Conservation Commission (COGCC) was done appropriately and accurately. This year Occidental, and all of its subsidiaries, will pay over $200 million in ad valorem tax to Weld County alone – taxes that fund schools, first responders, and critical public services,” said Jennifer Brice, director of communications and public affairs for Occidental.

Houston-based Noble Energy Inc. recently set an oil and gas production record in Colorado, according to the Denver Business Journal.

The Colorado Independent reached out to the three companies and additional comments may be added if provided.

The state bases its severance taxes on gross income from oil and gas production and not the well production reports. But the companies drilling in Colorado are required by law to submit the reports to the Colorado Oil and Gas Conservation Commission. And the Department of Revenue can then use the reports to ensure that companies paid enough in taxes.

Daniel Carr, a communications manager at the Department of Revenue, said well production reports are not the primary documents the department uses to confirm whether a company has paid enough. The Colorado Independent has requested information on the number of times the department has audited oil and gas companies for additional context.

At the same time the Colorado Oil and Gas Conservation Commission provided the list of company names and their missing reports to reporters, it also notified the Colorado Oil and Gas Association, an industry trade group.

“We have been talking with them all along through this process,” said Megan Castle, a spokesperson for the commission. “They are well aware of the list and we are very interested in making sure that they work to get into compliance.”

The state said it has updated its IT system so that companies are notified when they do not file well production reports. They have 30 days to then do so or face penalties.

Dan Haley, president of COGA, said in a statement the list does not indicate these companies did not pay their taxes. He said the reports represent less than 1% of all required reports during the audit period.

“Unfortunately, our members still have not been told why these reports were either rejected or are considered missing. Yet, many of our member companies are being unfairly named in the media with no way to defend themselves or explain these years-old reports,” he said.

Citing the Oil and Gas Conservation Act, the COGCC says it is not allowed to fine companies for potential violations that occurred more than a year ago. Colorado Rising, an anti-fracking group, is disputing that, threatening to sue the state if it does not penalize the companies for failing to file reports from 2016 to 2018. The group wants the COGCC to penalize companies $15,000 per violation, per day, a penalty set out in state law.

Below is a list of the companies and the number of missing reports.

Missing Production Reports for Wells Subject to Severance Tax 2016‐2018

ChartFebruary 2020

KERR MCGEE OIL & GAS ONSHORE LP 3942
NOBLE ENERGY INC 3742
BONANZA CREEK ENERGY OPERATING COMPANY LLC 1891
LARAMIE ENERGY LLC 971
FORTIGEN RESOURCES LLC 890
KINDER MORGAN CO2 CO LP 869
GREAT WESTERN OPERATING COMPANY LLC 598
DOVER ATWOOD CORPORATION 447
XTO ENERGY INC 284
TEP ROCKY MOUNTAIN LLC 242
OXY USA INC 174
EXTRACTION OIL & GAS INC 163
SRC ENERGY INC 137
WESCO OPERATING INC 135
STRACHAN EXPLORATION INC 132
FOUNDATION ENERGY MANAGEMENT LLC 126
PDC ENERGY INC 99
LOCIN OIL CORPORATION 97
BAYSWATER EXPLORATION & PRODUCTION LLC 96
CATAMOUNT ENERGY PARTNERS LLC 84
CRESTONE PEAK RESOURCES OPERATING LLC 83
SANDRIDGE EXPLORATION & PRODUCTION LLC 80
MULL DRILLING COMPANY INC 78
BP AMERICA PRODUCTION COMPANY 74
HIGH PLAINS ENERGY LLC 72
P O & G OPERATING LLC 69
SMITH ENERGY LLC 63
KP KAUFFMAN COMPANY INC 61
ENDURING RESOURCES LLC 60
SEELEY OIL COMPANY LLC 54
HILCORP ENERGY COMPANY 52
CATAMOUNT ENERGY PARTNERS LLC 52
TOM FENNO PRODUCTION LLC 50
X FIELD GAS LLC 48
MARALEX RESOURCES INC 48
POC‐I LLC 48
D J SIMMONS INC 48
ALAMOSA DRILLING INC 48
ARCH OIL & GAS LLC 48
ENERVEST OPERATING LLC 45
VANGUARD OPERATING LLC 44
LOGOS OPERATING LLC 43
ENDURING RESOURCES LLC 40
PCR OPERATING LLC 39
INVESTMENT EQUIPMENT LLC 36
ABILENE PERFECT ENERGY JV LLC 36
CHOLLA PETROLEUM INC 36
GUNNISON ENERGY LLC 32
ARGALI EXPLORATION COMPANY 29
AXIS EXPLORATION LLC 25
HARBURG* RUDOLPH W 24
ALANCO ENERGY SERVICES INC 24
CUB CREEK ENERGY 24
CITATION OIL & GAS CORP 24
SMITH ENERGY CORP 24
VESSELS COAL GAS INC 24
WHEELER ENERGY COMPANY 24
PCR OPERATING LLC 22
SRC ENERGY INC 21
CCRP OPERATING INC 21
HILCORP ENERGY COMPANY 20
EAST CHEYENNE GAS STORAGE LLC 20
CHEVRON USA INC 18
CAERUS PICEANCE LLC 18
VERDAD RESOURCES LLC 17
TIMBER CREEK OPERATING LLC 15
TRUE OIL LLC 14
XTO ENERGY INC 13
PROSPECT ENERGY LLC 13
CONFLUENCE DJ LLC 12
INVESTMENT EQUIPMENT LLC 12
ENERPLUS RESOURCES (USA) CORPORATION 11
CHURCHILL ENERGY INC 11
BURLINGTON RESOURCES OIL & GAS LP 11
BENSON‐MONTIN‐GREER DRILLING CORPORATION 11
SANDLIN OIL CORP 11
LONGS PEAK RESOURCES LLC 10
URSA OPERATING COMPANY LLC 10
CONOCO PHILLIPS COMPANY 10
CORAL PRODUCTION CORP 9
WESCO OPERATING INC 9
TIMBER CREEK OPERATING LLC 9
SCHMID PROPERTIES INC 9
RED WILLOW PRODUCTION COMPANY 8
PLUG NICKEL OIL COMPANY INC 8
P O & G OPERATING LLC 8
HALDE OIL INC 8
GREAT WESTERN OPERATING COMPANY LLC 8
8 NORTH LLC 7
GULFPORT ENERGY CORPORATION 6
GILBERT‐STEWART OPERATING LLC 6
GRAND MESA OPERATING CO 6
MATRIX PRODUCTION COMPANY 6
MCCLANE ENERGY INC 6
PETROSHARE CORPORATION 6
MONUMENT GAS MARKETING INC 6
SCHREIDER & COMPANY INC 6
OMIMEX PETROLEUM INC 5
GORDON ENGINEERING INC 5
HIGHPOINT OPERATING CORPORATION 5
BAYSWATER EXPLORATION & PRODUCTION LLC 5
PARADOX UPSTREAM LLC 4
ROBERT L BAYLESS PRODUCER LLC 4
PHOENIX RESOURCES LLC 4
VECTA OIL & GAS LTD 4
ST CROIX OPERATING INC 3
PHOENIX RESOURCES LLC 3
RIM OPERATING INC 3
MALLARD EXPLORATION LLC 3
GRAND VALLEY RESOURCES INC 3
DUGAN PRODUCTION CORP 3
EAGLE OPERATING INC 2
FRITZLER RESOURCES INC 2
BERRY PETROLEUM COMPANY LLC 2
CAERUS PICEANCE LLC 2
APEX OIL VENTURES INC 2
CPX PICEANCE HOLDINGS LLC 2
CINNAMON CREEK OIL & GAS INC 2
MONT ROUGE INC 2
MURFIN DRILLING COMPANY INC 2
SUNBURST INC 2
TRUE OIL LLC 2
WESTERN INTERIOR ENERGY INC 2
STEHLE OIL COMPANY 1
STRACHAN EXPLORATION INC 1
NEWELL ENERGY LTD 1
RED WILLOW PRODUCTION COMPANY 1
PETROLEUM RESOURCE MANAGEMENT CORP. 1
CHOLLA PRODUCTION LLC 1
DIAMOND OPERATING, INC. 1
ARMOR PETROLEUM INC 1
AMERICAN PETROLEUM ENERGY CO 1
AGAVE OIL & GAS LLC 1
EDGE ENERGY II LLC 1
ENERGY QUEST II LLC 1
GREAT WESTERN OPERATING COMPANY LLC 1
IMPETRO RESOURCES LLC 1
INVESTMENT EQUIPMENT LLC 1

Source: Colorado Independent

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