[Federal Register Volume 63, Number 60 (Monday, March 30, 1998)]
[Notices]
[Page 15190]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-8168]
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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
[Docket No. SA98-65-000]
Pickrell Drilling Company, Inc.; Notice of Petition for
Adjustment
March 24, 1998.
Take notice that on March 10, 1998, Pickrell Drilling Company, Inc.
(Pickrell) filed a petition for adjustment under section 502(c) of the
Natural Gas Policy Act of 1978 (NGPA),\1\ with respect to its Kansas ad
valorem tax refund liability under Commission's September 10, 1997
order in Docket Nos. GP97-3-000, GP97-4-000, GP97-5-000, and RP97-369-
000.\2\ Pickrell's petition is on file with the Commission and open to
public inspection
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\1\ 15 U.S.C. 3142(c) (1982).
\2\ See 80 FERC para. 61,264 (1997); order denying reh'g issued
January 28, 1998, 82 FERC para. 61,058 (1998).
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The Commission's September 10 order on remand from the D.C. Circuit
Court of Appeals \3\ directed first sellers under the NGPA to make
Kansas ad valorem tax refunds, with interest, for the period from 1983
to 1988. The Commission's September 10 order also provided that first
sellers could, with the Commission's prior approval, amortize their
Kansas ad valorem tax refunds over a 5-year period, although interest
would continue to accrue on any outstanding balance.
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\3\ Public Service Company of Colorado v. FERC, 91 F.3d 1478
(D.C. 1996), cert. denied, Nos. 96-954 and 96-1230 (65 U.S.L.W. 3751
and 3754, May 12, 1997) (Public Service).
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Pickrell states that the Madden and the Barby-Harper are the wells
in question. According to the Statement of Refunds Due from Northern
Natural Gas Company for the Kansas ad valorem tax refund, Pickrell owes
a principal of $18,759.44 and interest of $37,094.76 calculated to
December 31, 1997, for a total of $55,854.20. If interest is extended
to March 9, 1998, the total amount due would be $56,738.68
Pickrell states that these were low-volume wells and were always
economically marginal. Although the Madden produced at rates
approximating 100 Mcf per day, the controlled price for its gas was
very low and ranged from $0.55 to $0.69 per Mcf. The Barby-Harper was a
103 well and received NGPA maximum lawful prices during 1984, it was
more expensive to operate as it was completed at a depth of below 5,000
feet and production dropped to 31 and 44 Mcf per day during 1985 and
1986.
The Madden has since been plugged and abandoned. The Barby-Harper
is still producing, but actually below its economic limit at 30 Mcf per
day. The operator has recently attempted to sell the lease, but has not
been successful. Pickrell owned no interest in these leases or wells,
but simply operated them for the benefit of the interest owners.
The working interest owners that received tax reimbursements are
Barbara Oil Company, Tammie L. Burton Trust #2, Jean Ann Fausser Trust,
Pickrell Acquisitions Inc, Carl W. Sebits, David Ruel Sebits Trust,
David H. Tripp, James E. Stewart, Jan Lee Stewart and Virginia M.
Johnson. They have refunded their proportionate shares of the principal
amount under the Statement of Refunds Due, but are requesting relief
from any refund of interest. Brenda C. Redfern, J. C. Anderson, Edgar
S. Curry, Newport Petroleums Inc, Herschel F. Vaughn and Carless
Resources Inc have been mailed notices of their share of the refunds
due, but no responses have been received. Cecil Burton, Peter W. John,
Dale M. Robinson, Kenton S. Stewart, Edgar C. Stewart and O. H. Stewart
are deceased and estates have been closed. Century Exploration filed
for bankruptcy in mid 1980's and company was liquidated. Bill J. Porter
Trust was dissolved.
Pickrell states that the recovery of interest on these refunds will
require years, if it will ever be recovered and that it is inequitable
to require a refund of interest.
Pickrell states that the amounts due from deceased and bankrupted
working interest owners are uncollectible and should be considered as
waived. The amounts due for the working interest owners who are non-
responsive should also be waived as uncollectible. To require payment
from Pickrell would be an unfair distribution of burdens since it never
received any benefit from the ad valorem tax reimbursements that were
passed through to the working interest owners.
Any person desiring to be heard or to make any protest with
reference to said petition should on or before 15 days after the date
of publication in the Federal Register of this notice, file with the
Federal Energy Regulatory Commission, 888 First Street, N.E.,
Washington, D.C. 20426, a motion to intervene or a protest in
accordance with the requirements of the Commission's Rules of Practice
and Procedure (18 CFR 385.214, 385.211, 385.1105, and 385.1106). All
protests filed with the Commission will be considered by it in
determining the appropriate action to be taken but will not serve to
make the protestants parties to the proceeding. Any person wishing to
become a party to a proceeding or to participate as a party in any
hearing must file a motion to intervene in accordance with the
Commission's Rules.
David P. Boergers,
Acting Secretary.
[FR Doc. 98-8168 Filed 3-27-98; 8:45 am]
BILLING CODE 6717-01-M