Texas Attorney General Opinion: S-144 Page: 3 of 6
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Hon. Robert S. Calvert, page 3 (S-144)
"Prior to the September 1, 1954 amendment
this part of the law read as folows::
"'Provided that the amount of such tax on
sweet and sour natural gas shall never be
less than 121/1500 W One Cent (10) per
thousand (1000) cubic feet.'"
Question No. 4
"Sub-section (2) of Section 1 (1) of Article 7047b,
V.C.S. provides that where gas is processed for its
liquid hydrocarbon content and the residue gas returned
by cycling methods to a gas producing formation that
the taxable value of such gas shall be 3/5ths of the gross
value of all liquids extracted, separated and saved from
such gas, such value to be determined upon separation
and extraction and prior to absorption, refining or
processing such hydrocarbons.
"Please advise me whether or not Sub:-section (3)
applies to that part of Sub-section (2) relating to cycled
gas, if so, is the tax to be paid at the oil rate on the
condensate that cqhld have been recovered, based on
100% of the area price, or is the tax to apply on 3/5ths
of the area price for condensate ?
Question No. 5
"Please advise me if the omission of the word
'Natural' in the amended law means that the minimum
value will apply to casinghead gas as well as natural
gas.
For clarity, we have numbered your questions from 1 to 5.
Subsection 3 of Section 1 (1) of Article 7047b, V.C.S., before
its amendment by the 53rd Legislature, read as follows:
"All liquid hydrocarbons that are recovered from
gas by means of a separator or by other non-mechanical
methods, incidental to the production of said gas, shall
be taxed at the same rate as oil." (1953 amendment)
As amended, said subsection 3 now reads as quoted on Page 1
of this opinion.
Condensate can be recovered from gas (that is, separated
from the gas) by a separator, which is a non-mechanical process, and
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Texas. Attorney-General's Office. Texas Attorney General Opinion: S-144, text, October 20, 1954; (https://texashistory.unt.edu/ark:/67531/metapth266529/m1/3/: accessed June 26, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu.; crediting UNT Libraries Government Documents Department.