Shale Gas Best Practices - Bertison-George, LLC · 2015. 3. 6. · 15 Bertison-George, LLC...
Transcript of Shale Gas Best Practices - Bertison-George, LLC · 2015. 3. 6. · 15 Bertison-George, LLC...
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Bertison-George, LLC
PIOGA Winter Meeting
Feb/24-25/2015
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2Bertison-George, LLC
Review of Historic Development
Severance Tax / Impact Fee – By the numbers
Summary
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Act 13
Impact Fee
Implemented
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Severance Tax / Impact Fee – By the
numbers
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$7,500,000 - County Conservation Districts/State
Conservation Commission
$1,000,000 - Fish and Boat Commission
$1,000,000 - PA Public Utility Commission
$6,000,000 - Department of Environmental
Protection
$750,000 - PA Emergency Management Agency
$750,000 - Office of State Fire Commissioner
$1,000,000 - Department of Transportation
$2,500,000 - Natural Gas Energy Development
$123,151,200 - Direct to Counties and Municipalities
(includes Housing Funds)
$82,100,800 - Marcellus Legacy Fund12
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13
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Bertison-George, LLC
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Variables:• Spud wells
• Commodity
Price
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Variables:• Production
• Commodity
Price
• Production
• Commodity
Price
• Spud Wells
• Commodity
Price
Results:Tax Method:Ohio:
2.5% Gas
$0.10 Oil
WV:
5% O&G +
$0.047 “temp”
PA:
Impact FeeOH and PA based on Unconventional production only. Utilizing HH pricing estimates will cause results to be overstated.
Ohio Ohio
Impact Fee Severance T ax
2012 8,855,000 448,526
2013 28,260,000 3,371,345
2014 15,850,000 10,107,110
52,965,000 13,926,982
PA PA *
Impact Fee Severance T ax
2012 204,210,000 168,717,253
2013 202,472,000 347,560,733
2014 225,752,000 523,779,237
632,434,000 1,040,057,223
* Utilizing Avg. HH Pricing and 3% Severance Tax Rate
Under Wolf proposal = $697 million 2014
WV WV
Impact Fee Severance T ax
2012 28,980,000 98,567,066
2013 13,410,000 114,252,434
2014 ?? 232,003,111
42,390,000 212,819,500
2014 Sev Tax Not included in total
Temp Fee Avg. 3.94%
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5% Severance + $0.047 per Mcf • Estimates that the total impact would be 5.8%
• For $0.047 to equal .8% the natural gas price
would need to equal $5.88 per Mcf.
• Based on Current HH March pricing $0.047 would
equal ~1.7%. ($0.047 / $2.83)
Total 6.7%
• Transco Z6 trading at a $1.8671 (premium Non-
winter months trading at a discount)
Total value $4.70 Vs. $5.88
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Impact on conventional production
Cuomo won’t be in office for ever
Act 13 have resulted in hundreds of millions being
collected
• State and Local agencies have benefited
• Pennsylvania citizens have benefited
Can you spell OH..
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Questions for Wolf:• What will the split be between impact funding and
pensions/general fund?
• How can we find a Wolf administration’s math 101
tutorial?
• Factored into their analysis?:
How much additional gasoline taxes will be collected
from production companies and supporting industry
moving their equipment?
As always, the devil is in the details!
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THANK YOU!
Joe Baran
Principal
Bertison-George, LLC
www.bertison-george.com
412-258-5262
Bertison-George, LLC
Office Locations:Headquarters Financial Branch4031 Old William Penn Hwy 200 Schermerhorn St
Murrysville, PA 15668 Brooklyn, NY 11201