State of Wyoming. Personal Property Valuation Manual Wyoming Department of Revenue Property Tax Division Appraisal Services

Transcription

1 State of Wyoming Personal Property Valuation Manual 2017 Wyoming Department of Revenue Property Tax Division Appraisal Services 0

2 TABLE OF CONTENT FORWARD CHAPTER 1 ASSESSMENT POLICY SECTION 1.1 WYOMING CONSTITUTION 7 SECTION 1.2 GENERAL ASSESSMENT 7 SECTION 1.3 MACHINERY OR EQUIPMENT LOCATED (2 +) COUNTIES 8 SECTION 1.4 INTERFERENCE WITH COUNTY ASSESSOR 9 SECTION 1.5 CONFIDENTIALITY 9 SECTION 1.6 APPEALS 10 SECTION 1.7 STATUTE OF LIMITATIONS 11 CHAPTER 2 PERSONAL PROPERTY TAX EXEMPTIONS SECTION 2.1 GOVERNMENTAL EXEMPTIONS 13 SECTION 2.2 PUBLIC PROPERTY, CHARITABLE, FRATERNAL, NON-PROFIT 14 SECTION 2.3 PERSONAL / FAMILY USE 15 SECTION 2.4 MISELLANEOUS EXEMPTIONS (INVENTORY, MOBILE MACHINERY, ETC.) 15 SECTION 2.5 FIRE SUPPRESSION & POLLUTION CONTROL 16 SECTION 2.6 INTANGIBLE PERSONAL PROPERTY 17 CHAPTER 3 PERSONAL PROPERTY DEFINED SECTION 3.1 PERSONAL PROPERTY, FIXTURES & TRADE FIXTURES 20 SECTION 3.2 CATEGORIES OF PERSONAL PROPERTY 21 SECTION 3.3 TANGIBLE VS. INTANGIBLE PERSONAL PROPERTY 22 SECTION 3.4 MOBILE MACHINERY 23 SECTION 3.5 TEMPORARY REGISTRATION OF MOBILE MACHINERY 24 SECTION 3.6 RENTAL OF LEASED MOBILE MACHINERY 25 SECTION 3.7 MANUFACTURED / MOBILE HOMES 26 CHAPTER 4 DISCOVERY OF PERSONAL PROPERTY SECTION 4.1 DISCOVERY OF PERSONAL PROPERTY 29 SECTION 4.2 METHODS OF DISCOVERY 29 SECTION 4.3 INTERPRETATION OF DATA 30 SECTION 4.4 SITUS (LEGAL TAXABLE SITUS) 31 SECTION 4.5 LEASED EQUIPMENT DISCOVERY METHODS 33 SECTION 4.6 RENDITION FORMS (SELF DECLARATION) 33 1

3 CHAPTER 5 NATURE OF PERSONAL PROPERTY VALUE SECTION 5.1 CONCEPT OF VALUE 35 SECTION 5.2 VALUE IN USE & VALUE IN EXCHANGE 35 SECTION 5.3 TRADE LEVELS 36 SECTION 5.4 MARKET VALUE VS. MARKET PRICE 36 CHAPTER 6 APPRAISAL PROCESS SECTION 6.1 APPROACHES TO VALUE 39 SECTION 6.2 INCOME APPROACH 39 SECTION 6.3 SALES COMPARISON APPROACH 41 SECTION 6.4 COST APPROACH 43 SECTION 6.5 RECONCILIATION 46 APPENDIX 1 OIL & GAS DRILLING RIGS, DRILL PIPE, DRILL COLLARS SECTION A 1.0 MARKET COMMENTS 48 SECTION A 1.1 NOTE TO ASSESSORS 48 SECTION A 1.2 CONDITION OF EQUIPMENT 48 SECTION A 1.3 DRILLING RIG VALUATION 49 SECTION A 1.4 MODEL / DEPTH CAPACITY GUIDELINE 50 SECTION A 1.5 DRILLING RIG VALUATION TABLES 59 SECTION A 1.6 TOP DRIVES 61 SECTION A 1.7 COIL TUBING DRILLING RIGS W/OUT DRILL TUBING 62 SECTION A 1.8 DRILL PIPE 63 SECTION A 1.9 DRILL COLLARS 68 APPENDIX 2 OIL & GAS FIELD EQUIPMENT SECTION A 2.1 NOTE TO ASSESSORS 74 SECTION A 2.2 CONDITION OF EQUIPMENT 74 SECTION A 2.3 WELLHEAD EQUIPMENT & (CHRISTMAS TREE) 75 SECTION A WELL HEAD TRAPPER 77 SECTION A 2.4 SURFACE PUMPING UNITS (PUMPJACK, BEAM PUMP, ETC.) 78 SECTION A 2.5 PNEUMATIC SURFACE PUMPING UNITS 80 SECTION A 2.6 SUCKER RODS 81 SECTION A 2.7 SURFACE INJECTION PUMPS W / PISTON & PLUNGER 81 SECTION A 2.8 SURFACE PUMPING UNIT CONTROLERS 82 SECTION A 2.9 SUBMERSIBLE WELLHEAD PUMPS (ESP) 82 SECTION A 2.10 VARIABLE SPEED DRIVES FOR SUBMERSIBLE PUMPS (VSD) 84 SECTION A 2.11 TRANSFORMERS 85 SECTION A 2.12 J-BOX FOR SUBMERSIBLE PUMPS 87 SECTION A 2.13 CONTROL PANELS SWITCHBOARDS FOR SUBMERSIBLE PUMPS 88 SECTION A 2.14 DISCONNECT SWITCHES 88 SECTION A 2.15 GAS PUMPING UNITS / ENGINES (MOTORS) 89 SECTION A 2.16 WATER PUMPS 90 SECTION A 2.17 ENGINES (GAS / DIESEL) 91 SECTION A 2.18 MOTORS, ELECTRIC (INDUSTRIAL) 92 SECTION A 2.19 GENERATOR SETS 93 2

4 SECTION A 2.20 PRODUCTION SEPERATORS 94 SECTION A 2.21 SCRUBBERS 97 SECTION A 2.22 HEATER / TREATER 98 SECTION A 2.23 FREE WATER KNOCKOUT 101 SECTION A 2.24 DEHYDRATORS 102 SECTION A 2.25 GAS PRODUCTION UNITS 103 SECTION A 2.26 WELDED STEEL TANKS 105 SECTION A 2.27 BOLTED STEEL TANKS 107 SECTION A 2.28 FIBERGLASS TANKS 109 SECTION A 2.29 FRAC TANKS 110 SECTION A 2.30 GUN BARREL & FLOW TANKS 111 SECTION A TANK HEATERS 112 SECTION A 2.32 METERING EQUIPMENT 113 SECTION A 2.33 VALVES 115 SECTION A 2.34 MOTOR VALVES 116 SECTION A 2.35 NATURAL GAS COMPRESSORS 117 SECTION A 2.36 PIPELINE PIGGING EQUIPMENT 118 SECTION A 2.37 LOGIC CONTROLLER 119 SECTION A 2.38 DIGITAL TIMERS 119 SECTION A 2.39 TUBULAR PRODUCT CASING 120 SECTION A 2.40 TUBING 121 SECTION A 2.41 FLOWLINES 122 SECTION A 2.42 FIBERGLASS BUILDINGS 123 SECTION A 2.43 CEMENTING / CEMENT HEADS 125 SECTION A 2.44 CEMENT BATCH MIXER 127 SECTION A 2.45 CEMENT LAB EQUIPMENT 127 SECTION A 2.46 CEMENT STORAGE 128 SECTION A 2.47 CEMENT TRAILER MOUNTED PUMPING UNIT 129 SECTION A 2.48 CEMENT TRAILER (BULK TRANSPORT) 129 SECTION A 2.49 HIGH PRESSURE AIR COMPRESSOR UNIT / SKID MOUNTED 130 APPENDIX 3 COAL BED METHANE EQUIPMENT SECTION A 3.1 COAL BED METHANE (DESCRIPTION / BACKGROUND) 132 SECTION A 3.2 CBM WELLHEADS 133 SECTION A 3.3 SWITCHES HEAVY DUTY SWITCHES (HDS) 135 SECTION A 3.4 AUTO ELECTRIC CONTROLS / PUMPS 135 SECTION A 3.5 CBM AUTO PILOT TELEMETRY AUTO PRODUCTION TRANSMISSON 136 SECTION A 3.6 CBM WATER PUMPS 137 SECTION A 3.7 BARTON RECORDING CHART 138 SECTION A 3.8 FLOW BRACELET ANALYZER 138 SECTION A 3.9 BLOWERS & CONTROLS FOR BLOWERS 139 SECTION A 3.10 CATALYTIC HEATER 139 SECTION A 3.11 CBM SUBMERSIBLE PUMP & MOTOR CONTROLS 140 SECTION A 3.12 VARIABLE SPEED DRIVE FOR SUBMERSIBLE PUMPS (VSD) 141 SECTION A 3.13 CBM WATER FLOW ANALYZER 141 SECTION A 3.14 MOVABLE BUILDINGS (IGLOO & P.O.D) 142 SECTION A 3.15 ELECTRIC MOTORS (TEFC) 143 SECTION A 3.16 CBM SCREW COMPRESSOR 144 SECTION A 3.17 CBM MOTOR CONTROLS 145 SECTION A 3.18 POSITIVE DISPLACEMENT PUMP 145 3

5 SECTION A 3.19 TOTAL FLOW COMPUTER 146 SECTION A 3.20 CBM POLY PIPE 146 SECTION A 3.21 SOLAR PANELS 147 SECTION A SOLAR PANEL SKIDS 147 SECTION A 3.23 BLOWDOWN GUARD (CATTLE GUARD) INSTALLED 147 SECTION A 3.24 WELL HEAD GUARDS (PIPE FENCING) 147 SECTION A 3.25 WELL SITE IDENTIFICATION SIGNAGE 147 SECTION A 3.26 FLARE STACKS (COMBUSTORS) 148 APPENDIX 4 LIFE & TRENDING & DEPRECIATION TABLES SECTION A LIFE TABLE 151 SECTION A 4.2 TRENDING FACTORS 154 SECTION A 4.3 DEPRECIATION TABLES 155 4

6 FORWARD The Wyoming Personal Property Manual is designed to assist county assessors and other interested parties with the discovery, listing, classification, and valuation of commercial & industrial personal property for ad valorem tax purposes. The information contained herein provides an overview of the personal property assessment procedures for ad valorem tax purposes, and promotes the uniform and equitable assessment of personal property owned and/or operated within the State of Wyoming. The Property Tax Division developed the following information and procedures from various sources including Federal Law, Wyoming Constitution, Wyoming Statutes, Department of Revenue Rules & Regulations, Uniform Standards of Professional Appraisal Practice, IAAO Standards and Appraisal Methodology, and additional outside sources. Although the manual covers a wide variety of topics including statutory reference, personal property definitions, valuation techniques, and updated cost, trending, and depreciation tables; this manual is designed solely as a guide and does not substitute the required appraisal knowledge and training required during the valuation of personal property. For questions regarding the assessment of personal property, or regarding the information published herein, please contact the Wyoming Department of Revenue Property Tax Division at To request a copy of this publication please go to and select 2017 Personal Property Manual or contact: Wyoming Department of Revenue Property Tax Division Attn: Brian Judkins 122 W. 25 th Street Herschler Building, 2 nd Floor West Cheyenne, WY brian.judkins@wyo.gov

7 CHAPTER 1: ASSESSMENT POLICY 6

8 In the State of Wyoming, all property is taxable unless it is specifically exempt. Chapter 1 provides a detailed summary of the constitutional and statutory authority and responsibilities of the Wyoming Department of Revenue, and the local County Assessor Offices, in the discovery, valuation, and assessment of personal property. 1.1 WYOMING CONSTITUTION Article 15, Section 11, of the Wyoming Constitution states: All property, except as in this constitution otherwise provided, shall be uniformly valued at its full value as defined by the legislature in (3) classes as follows: Gross Production of Mineral & Mine Products In Lieu of Taxes on the Land Where Produced; Property Used For Industrial Purposes As Defined by Legislature; All Other Property, Real and Personal 1.2 WYOMING STATUTE, GENERAL ASSESSMENT W.S (a)(i) states: All property within Wyoming is subject to taxation as provided by this act except as prohibited by the United States or Wyoming Constitution or expressly exempted by W.S W.S (b)(i), states: (A) All taxable property shall be annually listed, valued and assessed for taxation in the county in which located and in the name of the owner of the property on January 1; (B) All taxable personal property brought, driven or coming into Wyoming, or acquired, after the assessment date and prior to December 31 which remains in Wyoming at least thirty (30) days and has not been regularly assessed for taxation in any other Wyoming county is subject to and shall be assessed for all taxes levied in the county in which the property is located for that calendar year except as hereafter provided. Property subject to this paragraph brought, driven or coming into Wyoming, or acquired, after March 1 is subject to taxes only for the proportionate part of the year remaining, computed to the closest full month. W.S (b)(ii), states: All taxable property shall be annually valued at its fair market value. Except as otherwise provided by law for specific property, the department shall prescribe by rule and regulation the appraisal methods and systems for determining fair market value using generally accepted appraisal standards. 7

9 W.S (b)(iii), states: Beginning January 1, 1989, taxable value means a percent of the fair market value of property in a particular class as follows: (A) Gross product of minerals and mine products, one hundred percent (100%) (B) Property used for industrial purposes, eleven and one-half percent (11.5%) (C) All other property, real and personal, nine and one-half percent (9.5%) Note: Locally assessed property used, or held for use, for industrial purposes shall be classified by County Assessors pursuant to the Wyoming Department of Revenue Rules & Regulations, Chapter 9. For the purposes of this chapter, Industrial Property means those properties meeting the statutory definitions set forth in W.S (a)(xiv), and classified under the NAIC codes listed in Section 5(d) of Chapter 9. Furthermore, auxiliary real and personal property, and leased real and personal property, if the predominant use of such property is in support of, or auxiliary to, property used or held for use for industrial purposes, shall be classified as industrial property. W.S (b)(v), states: Except as provided in chapter 14 of this title, annually, commencing on January 1, the County Assessor or Deputy Assessors as provided by W.S (a) shall obtain from each property owner or person having control of taxable property in the assessment district for which they were appointed, a full, completed and detailed statement of the amount of taxable property owned by or subject to the control of the property owner. If a property owner fails to provide a listing of personal property owned by him or under his control by March 1, unless an extension is granted from the assessor in writing, the assessor shall issue an assessment of personal property from the best information available. The county assessor shall extend the date for listing personal property from March 1 to April 1 upon written request of the property owner provided the written request is made not later than February 15. The county assessor or his deputies or any representative of the department may examine any property. The county assessor or his deputies shall enter the fair market value of the property for taxation on the assessment roll MACHINERY OR EQUIPMENT LOCATED IN (2) OR MORE COUNTIES W.S (b)(ix), states: If machinery or equipment is located in two (2) or more counties during the calendar year, the county assessors of the respective counties, or the department of revenue if the assessors cannot agree, shall meet and prorate the assessed valuation of the machinery or equipment among the counties pursuant to rules and regulations promulgated by the department... Note: See Wyoming Department of Revenue Rules & Regulations, Chapter 9, Section 5(c)(i)(E) for guidance on machinery and equipment located in two or more counties. Refer to chapter 4.6 of this manual for information on reporting machinery and equipment located in multiple counties in the prior calendar year. 8

10 1.4 INTERFERENCE WITH COUNTY ASSESSOR W.S (c)(ix), requires: Require persons to furnish information concerning all relevant matters pertaining to property owned by them for purposes of taxation. W.S , (a), states: Any person interfering with the county assessor or deputy county assessor in the discharge of his duties, or any person refusing to allow the county assessor, deputy county assessor or representative of the department of revenue to examine any property pursuant to W.S (b)(v), is guilty of a misdemeanor, and upon conviction shall be fined not more than seven hundred fifty dollars ($750.00), or imprisoned for not more than six (6) months in jail or both. W.S , (b), states: Any person who fails to return any taxable property owned by him or under his control is guilty of a misdemeanor and upon conviction shall be fined not exceeding five hundred dollars ($500.00), imprisoned in the county jail not to exceed ninety (90) days, or both. 1.5 CONFIDENTIALITY W.S (q), states: (i) (ii) All taxpayer returns and return information shall be confidential and, except as authorized below, no current or former official, officer, employee or agent of the state of Wyoming or any political subdivision thereof shall disclose any such information obtained by him in connection with his service as an officer or employee. As used in this subsection, taxpayer returns and return information shall include, but not limited to, all statements, reports, summaries and all other data and documents under audit or provided by the taxpayer in accordance with law. Without written authorization from the taxpayer, no current or former official, officer, employee or agent of the state of Wyoming or any political subdivision thereof shall release taxpayer returns and return information pertaining to taxes imposed by this chapter, except: A. Information filed with the department may be released to the governor or his designee, members of the state board of equalization, to the commissioners and employees of the public service commission, to employees of the department of audit, the department of revenue, the consensus revenue estimate group and to the attorney general. Information filed with the county assessor may be released to the county board of equalization, the department of revenue and the department of audit. B. Upon prior notice to the taxpayer, information filed with the department may be released by the department, upon written application, to any other governmental entity if the governmental entity shows sufficient reason to obtain the information for official business. 9

11 C. Information concerning taxpayer s valuation and assessment shall be made available on a confidential base to the county board of equalization and the state board of equalization when the information is pertinent to an appeal before either board. D. Any other use authorized by law. (iii) (iv) (v) Any person receiving information pursuant to paragraph (ii) of this subsection shall sign an agreement with the department to keep the information confidential. The taxable value of the taxpayer s property is not confidential and may be released without qualification. Any person who negligently violates the provisions of this subsection is guilty of misdemeanor and upon conviction shall be fined not more than one thousand dollars ($1,000.00). Any person who intentionally violates the provision of this subsection is guilty of a misdemeanor and upon conviction shall be fined not less than one thousand ($1,000.00), but not more than five thousand dollars ($5,000.00) and imprisoned for not more than one (1) year. 1.6 APPEALS W.S ,(b) states: Appeals. The following shall apply: (i) Any person wishing to contest an assessment of his property shall file not later than thirty (30) days after the date of the assessment schedule properly sent pursuant to W.S (b)(vii), a statement with the county assessor specifying the reasons why the assessment is incorrect. The county assessor shall provide a copy to the county clerk as clerk of the county board of equalization. The county assessor and the person contesting the assessment, or his agent, shall disclose witnesses and exchange information, evidence and documents relevant to the appeal, including sales information from relevant statements of consideration if requested, no later than thirty (30) days prior to the scheduled county board of equalization hearing. The assessor shall specifically identify the sales information used to determine market value of the property under appeal. A county board of equalization may receive evidence relative to any assessment and may require the person assessed or his agent or attorney to appear before it, be examined and produce any documents relating to the assessment. The appeal may be dismissed if any person willfully neglects or refuses to attend a meeting of a county board of equalization and be examined or answer any material question upon the board's request. The state board of equalization shall adopt rules to be followed by any county board of equalization when conducting appeals under this subsection. All hearings shall be conducted in accordance with the rules adopted by the state board of equalization. Each hearing shall be recorded electronically or by a court reporter or a qualified stenographer or transcriptionist. The taxpayer may present any evidence that is relevant, material or not repetitious, including expert opinion testimony, to rebut the presumption in favor of a valuation asserted by the county assessor. The county attorney or his designee may represent the county board or the assessor, but not both. The assessor may be represented by an attorney and the board may hire a 10

12 hearing officer. All deliberations of the board shall be in public. The county board of equalization may affirm the assessor's valuation or find in favor of the taxpayer and remand the case back to the assessor. The board shall make specific written findings and conclusions as to the evidence presented not later than October 1 of each year; (ii) A county assessor may appeal any decision or order of the county board of equalization to the state board of equalization; (iii) (iv) (v) Any person aggrieved by any final administrative decision of the department may appeal to the board. Appeals shall be made in a timely manner as provided by rules and regulations of the board by filing with the board a notice of appeal specifying the grounds therefor. A complete record of the action from which the appeal is taken shall be transmitted to the board in a timely manner as specified by board rules and regulations; Any person including the state of Wyoming aggrieved by any order issued by the board, or any county board of equalization whose decision has been reversed or modified by the state board of equalization, may appeal the decision of the board to the district court of the county in which the property or some part of thereof is situated. The board and department shall not compromise or reduce the tax liability of any person owing a tax to the state of Wyoming, except that the department for good cause, may, but is not required to, compromise and settle with the taxpayer for payment of any taxes owed to the state of Wyoming which tax liability is disputed in good faith by the taxpayer and which liability has not been settled in law. In case the department and the person owing the tax do not agree with respect to tax liability, the department shall by order, assess and levy the full amount of tax due and any person aggrieved by the assessment may appeal the decision to the board pursuant to the Wyoming Administrative Procedure Act. 1.7 STATUES OF LIMITATIONS W.S (a), states: All personal property taxes not collected within ten (10) years from the time the taxes were levied shall be cancelled and are thereafter uncollectible. W.S (b), states: Property omitted from prior year tax lists discovered by the county assessor shall be added to the assessment roll and taxes computed and collected from the period the property was omitted not exceeding five (5) prior years or since the last change in ownership, whichever is less. 11

13 CHAPTER 2: PROPERTY TAX EXEMPTIONS Note: The following discussion does not represent a complete list of property exemptions, but is intended to highlight some of the most common exemptions related to personal property. For a more comprehensive reading of property tax exemptions please refer Wyoming Statute , and Wyoming Dept. of Revenue Rules & Regulations Chapter

14 2.1 GOVERNMENTAL EXEMPTIONS W.S states: (a) The following property is exempt from taxation: (i) Property owned by the United States the majority of which is used primarily for governmental purposes. The following is not owned and used primarily for a governmental purpose. A. Improvements placed on federal lands by persons for private or commercial use; B. Improvements furnished by the federal government to employees other than enlisted and officer personnel of the armed forces as a place of residence; C. Improvements and equipment rented, leased, loaned or furnished by the federal government to employees or groups of employees for the purpose of operating enterprises for which there is a service or admission charge; (ii) Property of the State of Wyoming owned and used primarily for a governmental purpose. The following property is not owned and used primarily for a governmental purpose. A. Improvements placed on state lands by lessees for private or commercial use; B. Improvements furnished by the state to employees as a place of residence; C. Improvements and equipment rented, leased, loaned or furnished by the state to employees or groups of employees for the purpose of operating enterprises for which there is a service or admission charge; (iii) Property owned and used by counties primarily for governmental purposes; (iv) Property of a Wyoming School district owned and used primarily for a governmental purpose excluding teacherages; (v) Property of Wyoming cities and towns owned and used primarily for a governmental purpose including; A. Streets and alleys and property used for the construction, reconstruction, maintenance and repair of streets and alleys; B. Property used to furnish sewer and water services; C. City or town halls, police station and equipment, traffic control equipment, garbage collection and disposal equipment and lands and buildings used to service and repair the halls, stations, or equipment; 13

15 D. Parks, airports, auditoriums, cemeteries, golf courses, playgrounds and recreational facilities. Any charges for the use of these facilities shall not exceed the cost of operation and maintenance to qualify for the exemption; E. Personal property used exclusively for the care, preservation and administration of city or town property; Note: Personal property that is leased by government entities, non-profit entities, religious entities, etc. is not exempt. This property is taxable to the owner or lessor. 2.2 PUBLIC PROPERTY, CHARITABLE, FRATERNAL, NON-PROFIT W.S states: (a) The following property is exempt from taxation: (vi) Property of a public library used for library purposes; (viii) Property of a cemetery used for cemetery purposes; (ix) Property of: A. A nonprofit organization, corporation, cooperative or association which is exclusively a water utility engaged in the production, gathering, transmission, distribution or sale of water for domestic use in Wyoming; and B. Any other organization, corporation, cooperative or association which is a water utility, if the property is used in the production, gathering, transmission, distribution or sale of water for domestic use in Wyoming. (xvi) Property of a museum or hospital district; (xviii) Property owned by the Wyoming community development authority excluding assessments for local improvements; (xix) Property of charitable trusts, the purpose of which conforms to W.S (a) and which is directly beneficial to the people of this state; (xxii) Property owned by a water and sewer district; (xxiii) Property of a water conservancy district; (xxv) Property used for schools, orphan asylums or hospitals to the extent they are not used for private profit; (xxvi) Property owned and used by a secret and benevolent society or association which is directly beneficial to the people of this state to the extent it is not used for private profit nor primarily for commercial purposes by the society, association or lessee thereof; (xxvii) Property owned by a nonprofit society, foundation or association and used primarily as a 14

16 community area center in which presentation in music, the arts and related fields are made in order to foster public interest and education therein, to the extent and in the proportion that receipts and revenues attributable to the above specified presentation bear to total receipts and revenues from the use and operation of the center including rentals and revenues received from the commercial use of the center not attributable to the above specified presentations; (xxxiii) Real and personal property owned by an irrigation district created under W.S through or a weed and pest control district created under W.S et seq. which is essential to the operation and maintenance of the district and which is used for no business or commercial activity unrelated to the operation and maintenance of the district. (xxxv) Property owned and used by a nonprofit corporation serving persons with disabilities, mental illnesses or substance abuse problems, or operating a family violence project to the extent it is not used for private profit nor primarily for commercial purposes; (xxxvii) Property owned by a conservation district formed pursuant to the Wyoming Conservation District Laws, W.S through PERSONAL / FAMILY USE W.S (a) states: (a) The following property is exempt from taxation: (xi) Personal property held for personal or family use excluding mobile homes required to be titled under W.S through ; Aircraft and Watercrafts: are exempt when used solely for personal use. If these properties are at any time used for any other purpose other than for personal use they become taxable. Appliances: Residential appliances other than built-in would be exempt from taxation. Vacation Rentals: If personal property is used both personally and non-personally, i.e. vacation rentals, the property held within becomes taxable, i.e. beds, couches, appliances, etc. 2.4 MISCELLANEOUS PERSONAL PROPERTY EXEMPTIONS W.S (a) states: (a) The following property is exempt from taxation: (xii) Inventories; (xiii) Vehicles subject to registration as defined by W.S (a)(i) and (a) and registered as provided by law; (xv) Snowmobiles; (xvii) In transit property; (xxxiv) Mobile machinery registered under W.S through

17 W. S (c) states: In addition to the other powers and duties imposed by law, the department shall: (viii) Specify the amount of land for mines or mining claims to which the ad valorem tax or assessment of coal lands provisions of the constitution apply. For purposes of this paragraph, all real and tangible personal property used underground in mining or used within the well in oil or gas exploration or production which historically has not been assessed and taxed based on the 1941 and 1963 attorney general opinions and which remains underground until its value is consumed in the production of the mineral shall be considered part of the mine or mining claim to which the ad valorem tax applies. The taxpayer may remove the equipment from underground for repair or to meet statutory or regulatory requirements, and such removal shall not be considered by the assessor in determining whether the property shall be separately assessed. The following apply to underground equipment: A. Equipment which is permanently underground is not subject to separate assessment; B. Equipment which is intended or otherwise designed to be consumed underground in the production of the mineral shall not be separately assessed for taxation during the normal course of mining or oil or gas exploration or production; C. Except as provided by this paragraph, equipment which is removed from underground shall be treated as tangible personal property and assessed accordingly. Farm Equipment: Farm equipment is taxable in the State of Wyoming. However this classification of personal property is exempt from sales tax, and therefore should not be included in the acquisition cost of equipment reported to county assessor s offices for valuation purposes. Appraisers should be aware that irrigation equipment is exempt from personal property taxes as it is typically included in the formula for irrigated land assessment. 2.5 FIRE SUPPRESSION & POLLUTION CONTROL W.S (a) states: (a) The following property is exempt from taxation: (x) Fire engines, stations, including land upon which located, and equipment used to extinguish fires. Note: Excerpt from Wyoming Department of Revenue, Rules, Chapter 14, Section 8, Fire engines or a station means dedicated equipment and land and improvements similar to that owned by the governmental entities as fire engines or fire stations used exclusively to support firefighting activities. The fundamental basis for the exemption is the benefit conferred upon the public by privately-owned fire engines and fire stations, and the consequent relief, to some extent, of the burden upon the state to use its facilities and equipment to support firefighting activities. Equipment used to extinguish fires means equipment functionally capable of extinguishing fires, which is primarily and typically used for fire suppression. The phrase does not include equipment used to protect the health or safety of employees in fire situations nor equipment used to detect the presence of fire. 16

18 Applicants seeking a tax exemption of fire suppression property must annually, complete the required application and submit it to the appropriate jurisdictions as indicated by the application instructions. A copy of the annual application is available at under the Property Tax Division, Forms Assessment Forms tab. (xx) Property used for pollution control to the extent provided by W.S Note: Excerpt from Wyoming Environmental Quality Act, W.S Property Exempt From Property Taxation The following property is exempt from property taxation pursuant to the provisions of this act and include facilities, installations, machinery or equipment attached or unattached to real property and designed, installed and utilized primarily for the elimination, control or prevention of air, water, or land pollution, or in the event such facility, installation equipment or machinery shall also serve other beneficial purposes and use, such portion of the assessed valuation thereof as may be reasonably calculated to be necessary for and devoted to elimination, control or prevention of air, water and land pollution... The county assessor shall determine the exempt portions on all property assessed pursuant to W.S (b). The determination shall not include as exempt any portions of any facilities, which have value as the specific source of marketable byproducts. Applicants seeking a tax exemption of pollution control property must annually complete the required application and submit it to the appropriate jurisdictions as indicated by the application instructions. A copy of the annual application is available at under the Property Tax Division, Forms Assessment Forms tab. 2.6 INTANGIBLE PERSONAL PROPERTY W.S (a) states: (a) The following property is exempt from taxation: (xxix) Intangible personal property as provided by subsection (b) of this section and except as specified in W.S (b)(xi). (b)the following shall be exempt from property taxation: (i) (ii) Goodwill if established and separately identified on a company s books and records, or affirmed by generally accepted accounting, or appraisal, principles; Any of the following intangible items: A. Workforce in place including its composition and terms and condition, contractual or otherwise, of its employment; B. Business books and records, operating systems or any other information base including lists or other information with respect to current or prospective customers; C. Any patent, copyright, formula, process, design, pattern, know-how, format, proprietary computer software or other similar items; D. Any customer-based intangible. As used in this subparagraph, customer-based intangible means composition of market, market share and any other value 17

19 resulting from future provision of goods or services pursuant to relationships, contractual or otherwise, in the ordinary course of business with customers. In the case of financial institution, customer-based intangible includes deposit base and similar items; E. Any supplier-based intangible. As used in this subparagraph, supplier-based intangible means any value resulting from future acquisitions of goods or services pursuant to relationships, contractual or otherwise, in the ordinary course of business with suppliers of goods or services to be used or sold by the taxpayer. (iii) (iv) (v) (vi) Any license, permit or other right granted by a person, or by a governmental unit or an agency or instrumentality thereof; Any covenant not to compete, or other arrangement to the extent such arrangement has substantially the same effect as a covenant not to compete, entered into in connection with an acquisition directly or indirectly of an interest in a trade or business or substantial portion thereof; Any franchise, trademark or trade name; Any of the following intangible items; A. Money and cash on hand including currency, gold, silver and other coin, bank drafts, certified checks and cashier s checks; B. Money on deposit; C. Accounts receivable and other credits; D. Bonds, promissory notes, debentures and other evidences of debt; E. Shares of stock or other written evidence of ownership; F. Judgments for the payment of money; G. Annuities and annuity contracts. Note: Applicants seeking a tax exemption of intangible personal property must annually complete the required application and submit it to the appropriate jurisdictions as indicated by the application instructions. A copy of the annual application is available at under the Property Tax Division, Forms Assessment Forms tab. Additionally, it is recommended that any applicants review the Wyoming Dept. of Revenues Rules & Regulations, Chapter 14 Section 11. *Intangible Real Property Is Not Exempt* - Common examples of intangible real property would include but are not limited to: (Easements, Air Rights, Water Rights, Mineral Rights, Development Rights, Possessory Rights, and Leasehold Interests). Individual real property includes all of the individual interests, benefits, and rights inherent in the ownership of the physical real estate. Real property is different from real estate. Real estate is the name associated with the tangible assets... Real property represents the individual legal rights associated with ownership of the tangible real estate. Since all legal rights are intangible, real property is an intangible. (Reilly, Robert F. & Schweihs, Robert P. Valuing Intangible Assets. New York: McGraw-Hill, 1998). 18

20 CHAPTER 3: PERSONAL PROPERTY DEFINED 19

21 3.1 PERSONAL PROPERTY, FIXTURES & TRADE FIXTURES Personal Property defined by the International Association of Assessing Officers, Property Assessment Valuation, Third Addition (2010) as: Any property that is not real property; it is all moveable items not permanently affixed to or part of the real estate, also known as personalty or chattels. Fixture defined by The Dictionary of Real Estate Appraisal, Fifth Addition (2010) as: An article that was once personal property, but has since been installed or attached to the land or building in a rather permanent manner so that it is regarded in law as part of the real estate. Identifying the difference between real and personal property is an important first step in the valuation process. Property which has been affixed (fixture) often leads to considerable debate between the classifications of real vs. personal for ad valorem purposes. In general, property affixed to real estate in a manner in which it loses its characteristics, as personal property, would become real property. Three basic tests are often used to assist in the determination of real vs. personal property. 1) Annexation / Appurtenance Has the property been attached to the realty or to something appurtenant to? Defined by the The Dictionary of Real Estate Appraisal, Fifth Addition (2010) as: Appurtenance Something that has been added or appended to a property and has since become an inherent part of the property; usually passes with the property when title is transferred. 2) Is the intended use of the property related to the primary use of the realty? As an example: A hot water heater is personal property until such time that it is appended to the plumbing system of real estate and its intended use becomes an integral and primary us of the realty. 3) Is the intention of the parties to make the personal property a permanent addition to the realty? The intention may be a formal, written agreement or it may be implied by the type of personal property. There is usually agreement that personal property loses its nature as such, and becomes real property if affixed in such a way that it loses its original physical character and cannot practically be restored to its original condition; and if the property cannot be reasonably removed from the real estate without loss of value to either. Trade Fixture defined by The Dictionary of Real Estate Appraisal, Fifth Addition (2010) as: Articles placed in or attached to rented buildings by a tenant to help carry out the trade or business of the tenant. Trade fixtures are usually personal property. Care should be taken to identify within lease agreements, those items which are installed, owned, and used by the tenant vs. fixtures that are owned by the landlord and are intended to remain after the termination of existing lease for use as part of the realty. 20

22 Common examples of tenant improvements (trade fixtures) which could be assessed as personal property would be: flooring, shelving, counters, wiring, custom signs, decorative items, stoves, ventilation systems, booths, bars, etc. The basic premise in determining if a fixture is assessable as personal property is the nature of its use. If the item is designed, installed, and used in a manner that is intended to benefit a specific business more than the reality it is attached to, it will usually fall under the definition of trade fixtures. An example of this would be an eatery that leases space in a mall, strip mall, or stand-alone building. The large refrigeration systems (all upgraded wiring), stoves (all upgraded gas lines or sprinkler systems), hood vents, exhaust systems, fans, etc. would typically be owned by the tenant, installed by the tenant, used specifically for the tenants business and would be reasonably expected to be removed upon termination of the lease or conversion of the space to an alternative business use. Thereby, these items would be considered trade fixtures which are assessable as personal property. 3.2 CATEGORIES OF PERSONAL PROPERTY Personal property can typically be categorized in to four major segments. 1. Inventories 2. Fixed Assets 3. Leasehold Improvements 4. Intangible Personal Property W. S (ix) states: Inventories means any personal property held for resale consisting of goods, wares or merchandise including stocks of raw or finished material, unassembled parts, work in progress or finished products constituting the inventory of a merchant or manufacturer; Fixed Assets property is identified or defined by three primary characteristics; A) Tangible, B) Acquired For Use Not For Resale, C) Items are of a relatively permanent nature with a useful life of at least one year and typically (but not always) capitalized by the owners and are subject to depreciation. Examples of fixed assets include but are not limited to: Machinery & Equipment, Furniture & Fixtures, Computers & Electronic Equipment, Aircraft, Motor Vehicles, Mobile Homes, Boats, Leased Equipment, Construction Work In Progress, Tools, Dies, Jigs, Molds, Etc. Leasehold Improvements are upgrades to a leased space, made by the lessee, and owned by the lessee. Leasehold improvements are also commonly referred as trade fixtures (discussed under section 3.1). Intangible Personal Property is property that represents evidence of value, or the right to value, under law and/or custom. Bonds, notes, trusts, patents, annuities, mortgages, copyrights, accounts receivables, insurance policies, money (cash), and shares of stock: are all examples of intangible property. Intangible personal property does not include such items as engineering reports, legal expenses, or research and development costs associated with the creation or installation of a tangible asset. 21

23 3.3 TANGIBLE / INTANGIBLE PERSONAL PROPERTY Personal property for the purpose of taxation in the State of Wyoming falls into two categories tangible and intangible. Tangible Personal Property is defined under W.S (xvi), which states: Tangible personal property means personal property that, by its nature, is perceptible to the senses; property that has a physical presence beyond merely representation and that is capable of being touched; property that is able to be perceived as materially existent; property that is not intangible. Tangible personal property includes, but is not limited to, the following: 1. Furniture, Fixtures, Equipment 2. Computer Hardware 3. Computer Software (Non-proprietary) 4. Store Equipment 5. Manufacturing Equipment 6. Signage 7. Communication Equipment 8. Professional Libraries 9. Leased Equipment 10. Tools 11. Farm Machinery & Equipment 12. Watercraft 13. Aircraft 14. Supplies & Repair Parts (Not Held for Resale) 15. Leasehold Improvements (Not Part of Realty) 16. Oil and Gas Field Equipment 17. Oil & Gas Gathering & Flow Lines 18. Mobile Machinery (Not Registered) Intangible Personal Property is defined under W.S (a)(vii), which states: Intangible personal property means personal property that lacks mass and cannot be seen, felt, weighed, measured or otherwise perceived by the senses; property that has no physical existence beyond merely representational. Intangible property s value lies chiefly in what it represents, and its existence may be evidenced by a document. Intangible Personal Property includes, but is not limited to, the following: 1. Goodwill 2. Workforce in Place 3. Any Customer Based Intangible, i.e. (customer lists) 4. Any Supplier Based Intangible, i.e. (contractual or relationship) 5. Patents, Copyrights, Formulas, Designs, Trademarks, Etc. 6. Proprietary Computer Software 22

24 7. License, Permit, or other Right Granted By a Governmental Unit or Agency 8. Money, Cash, or Currency 9. Accounts Receivable 10. Bonds, Promissory Notes 11. Shares of Stock 12. Judgments for Payments, Annuities 3.4 MOBILE MACHINERY Mobile Machinery is a unique classification of personal property that is subject to taxation in the State of Wyoming. Although a specific listing of mobile machinery is not provided; W.S (a)(i) states: Mobile machinery means heavy equipment, except shop and hand tools or attachments, which is self propelled, towed or hauled and used primarily in construction and maintenance of roads, bridges, ditches, buildings, or land reclamation. Note: The registration of mobile machinery is applicable only to the machine itself and does not preclude the reporting or assessment of any accessory attachments. If a company owns separate buckets, drilling components, forks or other attachments these items must be separately reported to the county assessor s office for assessment. W.S (b) states: Except as provided in W.S , no mobile machinery shall be operated in this state, whether or not upon the public highways of this state, unless registered under this division. Prior to using any mobile machinery on any construction project receiving state funds, the contractor shall provide certification to the public agency or engineer in charge of the project that the mobile machinery has been registered as required by this division. This Division means W.S through W.S (c) states: Notwithstanding subsection (b) of this section, mobile machinery listed on property tax assessment roll in this state is exempt from the registration requirement of this division. Each county treasurer shall issue stickers pursuant to this division to owners of mobile machinery listed on property tax assessment roll in this state upon receipt of an application by the owner and payment of an administrative fee of six dollars ($6.00) Note: The $6.00 application fee is not in lieu of the registration fee and is solely for the issuance of the required decal once the registration fee or property tax assessment has been paid. W.S states: (a) Owners or operators of mobile machinery required to be registered under W.S through shall apply to a county treasurer in this state annually and pay a registration fee in lieu of property taxes as provided in subsection (e) of this section. For mobile machinery registered after February 1 in any year, the fee shall be computed by multiplying the fee under subsection (e) of this section times the number of full months remaining in the calendar year and dividing by twelve (12). County treasurers shall 23

25 distribute fees collected under this subsection in the same manner and proportion as property taxes. (b) County treasurers shall issue stickers and certificates of registration to owners of mobile machinery registered under this section. The sticker shall be displayed on the mobile machinery for which it was issued so as to be visible by a person not operating the mobile machinery. (c) The department shall prescribe application forms and the form of stickers and certification of registration issued under this section and provide them without charge to each county treasurer. The department shall furnish stickers and a mobile machinery register to each county treasurer in a similar manner as a vehicle registration is provided under W.S The department may promulgate rules necessary to implement this act. Note: The department for the purposes of this division referred to the Wyoming Dept. of Transportation. (d) The registration of mobile machinery expires ten (10) days after its transfer unless the original owner files an application for a transfer of ownership accompanied by the fees based on the amount which would be due on a new registration as of the date of transfer less any credit for the unused portion of the original registration fees for the original registration for the mobile machinery and an additional fee of six dollars ($6.00) with a county treasurer. Upon receipt of a completed application and the required fee, the county treasurer shall issue the new owner a new certificate of registration. The fee collected under this subsection shall be deposited in the county general fund. (e) The fee for mobile machinery shall be computed by multiplying the statewide average county, school district and state property tax mill levy for the preceding year as computed by the state board of equalization times the applicable assessment factor times the valuation of the mobile machinery. The department of revenue shall establish schedules for valuation of mobile machinery for use by county treasurers. 3.5 TEMPORARY REGISTRATION OF MOBILE MACHINERY W.S states: (a) In lieu of registration under W.S , a non-wyoming based owner or operator of mobile machinery may apply for a temporary registration sticker valid for not more than eleven (11) months, providing the temporary registration sticker shall not extend in to the next calendar year, from either a county treasurer or the department. The owner or operator shall present sufficient documentation to allow the county treasurer or the department to establish the valuation of the mobile machinery. The fee for the authority to use and display the temporary sticker shall be computed by multiplying the fee under W.S (e) times the number of months requested in the calendar year and dividing by twelve (12), plus an administrative fee of ten dollars ($10.00) and six dollars ($6.00) for the sticker. 24

26 (b) The fees for mobile machinery collected by the county treasurer under this section shall be distributed in the same manner and proportion as property taxes. The fees for mobile machinery collected by the department under this section shall be distributed in the same manner as fees for non-wyoming based commercial vehicles under (a). Administrative fees collected by county treasurer shall be deposited in the county general fund, and those collected by the department shall be deposited into the highway fund. 3.6 RENTAL OR LEASED MOBILE MACHINERY W.S states: (a) In lieu of payment of the registration fee under W.S , the owner of any mobile machinery who is regularly engaged in the sale, rental or both sale and rental of mobile machinery and who rents or leases mobile machinery to another individual or corporation in which the owner has no interest for one (1) or more periods of at least sixty days in any calendar year may elect to pay a registration fee under this section. (b) Authorization for payment of registration fees under this section shall be obtained from the treasurer in the county in which the owner s principal place of business is located. The owner shall also apply for an indentifying decal for each item of mobile machinery to be rented or leased. The identifying decal shall be affixed to the item of mobile machinery to be rented or leased. The owner shall keep records of each decal issued and a description of the item of mobile machinery to which it is affixed. The fee for each identifying decal is six dollars ($6.00), and payment shall be made at the time of application to the county treasurer. Decals expire at the end of each calendar year, and application for new decals shall be made for each calendar year or portion thereof. The owner shall remove an identifying decal upon the sale or change of ownership of mobile machinery. The fee collected under this subsection shall be deposited in the county general fund. (c) Upon receiving authorization under subsection (b) of this section, the owner shall collect from the user a registration fee in the amount equivalent to one-half of percent (0.5%) of the amount of the rental or lease payment. No later than the twentieth day of January following, the owner shall submit a calendar year report, using forms which shall be furnished by the department of revenue, to the county treasurer in which the mobile machinery is used, together with the remittance for all taxes collected for the proceeding calendar year. (d) Reports shall be made even if no registration fees were collected by the owner in the previous calendar year. Failure to make reports for sixty (60) days is grounds for termination of the owner s right to pay fees under this section. If the owner has failed to remit fees received from a renter or lessee during the sixty (60) day period, the county treasurer may proceed to collect these delinquent fees in the manner provided for collection of delinquent taxes under W.S (e)(i)(a). (e) The Department of Revenue shall promulgate rules and regulations for the administration and enforcement of this section. Note: It is highly recommended that any parties engaged in the rental/lease of mobile machinery review the Wyoming Dept. of Revenue Rules & Regulations, Chapter

27 W.S states: (a) No person shall knowingly make any false statement in any application or other document required under W.S (b) The department of revenue shall promulgate rules and regulations for the administration and enforcement of this section. 3.7 MANUFACTURED / MOBILE HOMES As required by Wyoming Statute, mobile homes are required to have a certificate of title and are considered as personal property. W.S (b) states: Except as provided by W.S , every owner of a mobile home located in this state for which no Wyoming certificate of title has been issued to the owner, or the transferee upon transfer of ownership of a mobile home, shall apply for a certificate of title at the office of a county clerk within (30) days of the date the mobile home became subject to this act, or upon a transfer, within thirty (30) days of the date of transfer. W.S (a) (iv) (b) states: If a mobile home is installed on a permanent foundation and is taxable as real property, the certificate of title or manufacturer s certificate of origin, if any, shall be surrendered to and cancelled by the county clerk of the county in which the mobile home is located except that no title shall be cancelled under this subsection unless all liens on the home have been released... Department of Revenue Directive (October 25, 2006 Acting Administrator Wade W. Hall): Titled mobile homes should be listed under an M account type in RealWare. This account type is specifically earmarked for titled mobile homes. M Account will receive a separate assessment notice from Real property ( R accounts in RealWare), and are conveyed as a separate item from Real Property to the tax roll, unless the assessor uses the Group Account function to group the M account with R account. Under no circumstances should the assessor use the Group Account function to group R and/or M accounts together that are not located in the same tax district. The County Treasurer may also combine the mobile home with the real property for purposes of the tax lien if the name(s) on the mobile home title and real property are identical, but the mobile home is still separately conveyable from the real property via lawful conveyance of mobile home title. Mobile homes that have had the title surrendered and cancelled (often referred to informally as purged ) become part of the real property and should be listed under the R account. The assessor should use the appropriate real property Abstract Code for the purged mobile home. 26

28 Manufactured / Mobile Home Cost Manual: All manufactured/mobile homes pricing may be found in the Residential Marshall & Swift Valuation Manual in the Manufacturing Housing Section. Hand pricing of Manufactured / Mobile Homes used as bunk houses or man camp houses should be valued out of this same section. Care must be taken to distinguish between Manufactured/Mobile Homes and Modular Homes for valuation purposes. Manufactured/Mobile Homes are valued using the Mfg. Housing price guides in Marshall & Swift, where-as a Modular Home is valued as a site-built residence. Manufactured/Mobile Homes also called HUD Code homes are residential structures, single or multi-sectional units, eight feet or greater in width and at least thirty-two feet in length. They are built on steel undercarriages with necessary wheel assemblies to be transported to permanent or semi-permanent sites. The wheel assembly can be removed when the unit is delivered to the home site, but the steel undercarriage may remain intact if it is a necessary structural component. In some instances, the presence of a steel undercarriage as a necessary structural component is the primary distinguishing factor between a manufactured home and a modular house. Manufactured/Mobile Homes will vary in quality and amenities just as a site-built home. Modular Home housing will meet local building codes and can be subject to standard regional or state building codes for modular construction. Although a Modular house can be transported on a steel undercarriage, the undercarriage is generally not a permanent and necessary structural component, and is usually removed when the unit is placed on a foundation. Modular housing should be priced from the Site-Built housing costs section. Panelized or Prefabricated Homes are packaged homes constructed on-site from preengineered, factory-built components. Panelized Homes are generally valued as site-built homes when conforming to local building codes. Manufactured/Mobile Homes, if placed on a permanent foundation, in which the title is surrendered will be considered as a Modular Home for valuation purposes and should be valued using the site-built cost sections. The primary distinguishing factor between a manufactured/mobile home and a travel trailer is size according to W.S and W.S Manufactured/mobile homes are transportable structures, which exceed eight and one half (8½) feet in body width. Travel trailers are licensed transportable structures, which do not exceed eight and one half (8½) body feet in width. 27

29 CHAPTER 4: DISCOVERY / IDENTIFICATION 28

30 4.1 DISCOVERY OF PERSONAL PROPERTY Discovery is defined by IAAO 2007 as: The process whereby the assessor identifies all taxable property in the jurisdiction and ensures that it is included on the assessment roll. Assessment of personal property is contingent on the discovery of property, the identification of the owner(s) of the property, and the full disclosure of property details and costs by the owner(s). Discovery of personal property by any prescribed method requires adequate planning, staffing, and supporting resources within a jurisdiction. There are three areas of discovery which will be individually discussed below that should be considered in the discovery of personal property, (Methods of Discovery, Interpretation of Data & Situs). 4.2 METHODS OF DISCOVERY Self Declaration Also known as a Rendition Form represents the primary discovery tool for most jurisdictions because Wyoming statutes (Refer to Section 1.2) require the annual filing by each property owner in the county in which property is owned. Rendition Forms are provided by the Department of Revenue and are available on the department s website Additionally each assessor sends a prior year s listing of all property reported in the prior year to all filers. Reported property should include all leased, loaned, expensed, and fully depreciated personal property, and should report the total acquisition cost of all property including purchase price, taxes, freight, installation, etc. of all property as was required to acquire the property and put it into its highest and best use being its installed value or use value. Although self declaration is an important tool in the discovery of taxable personal property; there are limitations to its usefulness without further efforts in the discovery and/or interpretation of the data, due to instances such as non-filings or the reporting of incomplete or inaccurate data. Annual Canvass Any successful discovery program is dependent on a regular review or canvass of a jurisdiction or at minimum, targeted segments of a jurisdiction (in-turn) to provide a semi-regular review of the issues such as non-filers, the movement or situs of personal property, new accounts, incomplete filings, etc. Annual canvassing should be an ongoing process by each person responsible for the discovery of personal property within a jurisdiction, and can often be an effective tool in our daily activities or lives. As an example some common personal property items often over looked and not reported are items we see in the establishments we conduct business with on a daily basis. Do retailers report the security tags on merchandise and clothing? Do retailers report the merchandise held in store as displays that are not for sale (prescription eye glasses)? How many lifts did your local mechanic report on their filing? Did your local restaurants report booths, tables, and chairs used for dining in their establishments? 29

31 Additionally, an annual canvass may be most effective when the systematic canvassing of an entire segment or targeted portion of the jurisdiction is conducted at one time. As an example, if every fast food establishment in a jurisdiction is canvassed by way of physical inspection and desk audit, an assessor may be able to obtain some important data which can be used to; verify reported cost of common items such as tables and chairs or fryers or refrigeration systems, provide estimates of the average equipment used in that type of business for non-filers (perhaps on a sq/ft basis), discover a common item of personal property not reported by these types of business, and provide the basis for data analysis to determine if any adjustments to trending factors or depreciation schedules may be warranted for a particular industry. Some additional steps or tips which may result in an efficient canvass would include the creation of a list of the previous year s filings with a geographical boundary so that the field staff may compare and make note of any changes. Physical visitation of as many locations as possible and making quick notes on information including any new owners, the amounts or type of equipment visible (including tenant fixtures), any possible leased equipment, verification of owners name, address. Additional Method of Discovery The Property Tax Division provides access for the assessor s offices to IHS Global Inc. website for drilling rig reports which helps to track and locate drilling rigs within a given county throughout the year. Additionally, the Property Tax Division annually provides a Sales Tax Licensing List, and a boat list of commercial owners obtained from the Wyoming Game & Fish Department. Also, there is information regarding aircraft located in your counties available on the FAA s website. The Technical Services Group provides various maps to assist in the identification of personal property which are available upon request. Examples of maps that are available are oil & gas well sites and mining permits of hard minerals sites. Some additional tools available to the assessor in discovering personal property include desk audits, telephone audits, mailing audits, and some additional sources for information on business may include: 1. Real Property Field Appraiser Reports and Records 2. Wyoming Business Council 3. Corporate Charters (Wyoming Secretary of State) 4. Chamber of Commerce Memberships 5. Building Permits 6. City Directories 7. Web Sites 8. Classifieds 9. List of holders of sales tax license (provided to each county by the DOR) 10. Lessee on agricultural leases 11. Municipal business Licensing Department 4.3 INTERPRETATION OF DATA The appraiser-assessors often rely on the cost approach and the reporting of cost information by the taxpayer as the primary method of business equipment valuation. This approach further relies on a presumption that the taxpayer s accounting records are fully forth coming, and the accounting methods conform to generally accepted accounting principles. This approach also relies on an often false presumption that these generally accepted accounting principles, used for income tax and financial reporting, are reliable in the application of corresponding appraisal principles. 30

32 Therefore, the review of accounting records, the questioning of reported data, and periodic auditing is a necessary part of an accurate, acceptable, and uniform assessment utilizing the cost approach. As an example: Leasing companies of office equipment (copiers, fax machines, postage meters, etc.), which are located in almost every jurisdiction, have been historically known to report the cost of the machines they own at a manufacturer s trade level vs. the consumer level which would be the highest and best use of the property, and the trade level by which market value is derived. (See Chapter 5 Nature of Personal Property Value) To further highlight this scenario; A) A company who manufactures copy machines, and then leases a large portion of their machines, has a manufacturing cost of $2,000 / per machine. B) If a consumer wishes to purchase one of these machines the acquisition price, including taxes, freight, and set-up is estimated, based on market data, at $5,000 / per machine. C) When the manufacturing / leasing company reports the machines they own & lease within a given jurisdiction they provided a total cost of $2,000/ per machine, being the total cost they paid for each machine they own. D) When the consumer who purchased the same machine reported by the manufacturer/leasing company, they reported the total acquisition cost of $5,000/machine, being the total acquisition cost, evidenced by the recent purchase of this machine. E) In this scenario, the assessor has the same business equipment reported by two different tax payers with two reported original or acquisition costs. Without analysis and interpretation of the data presented by these taxpayers the assessor is risking the un-uniform assessment of these machines, and under-valuation of the machines owned by the manufacturer/leasing company. With some additional analysis the assessor may quickly come to realize that the $2,000 that the manufacturer/leasing company has provided represent a manufacturing trade level, and not an end-use or consumer trade level. Although the leasing company may have only capitalized a cost of $2,000 per machine when they were built, this is not the value of those machines because it does not capture the additional cost associated with bringing that property from a manufacturer s trade level, to a consumer level which represents the highest and best use of that property, and therefore represents the market value. 4.4 SITUS (LEGAL TAXABLE SITUS) Situs is defined by IAAO 2007 as: The appropriate location of property for assessment and taxation purposes. The discussion of situs may at times be controversial when an assessor must determine the taxable location of moveable property such as boats, aircraft, and mobile homes. However, situs is an especially important issue because when personal property acquires a more or less permanent or fixed location (situs), that jurisdiction and no other may impose a tax. 31

33 As a rule of thumb, situs for moveable property may be determined according to the business premise being defined as a more or less permanent situs from which it operates. Therefore, in the case of aircraft & boats the location that is used for the original registration could be construed as the situs location for that property. For other business property which is movable, and is used in different locations on a daily basis, the business location could be construed as the situs for the movable property used in the daily operations of that business. For reference, Wyoming Statutes prescribes the following regarding situs. W.S (a)(ii) states: All property claimed to be in transit shall be designated as being in transit upon the books and records of the public or private warehouse or storage area supervisor wherein the same is located... W. S (viii) states: In Transit Property means manufactures goods, wares, seed, feed, fertilizer, tools, supplies and merchandise which is in interstate commerce, or, Wyoming assembled or manufactured products being held for out-of-state sale, which are consigned or placed in any storage area in Wyoming for storage, repacking, processing, fabricating, milling, disassembly or assembly in transit to a final destination outside Wyoming whether the destination is specified before or after the transportation begins; Property in transit is exempt from ad valorem taxation. W.S (b)(i)(a) states: All taxable property shall be annually listed, valued and assessed for taxation in the county in which located and in the name of the owner of the property on January 1; W.S (b)(i)(b), states: All taxable personal property brought, driven or coming into Wyoming, or acquired, after the assessment date and prior to December 31 which remains in Wyoming at least thirty (30) days and has not been regularly assessed for taxation in any other Wyoming county is subject to and shall be assessed for all taxes levied in the county in which the property is located for that calendar year except as hereafter provided. Property subject to this paragraph brought, driven or coming into Wyoming, or acquired, after March 1 is subject to taxes only for the proportionate part of the year remaining, computed to the closest full month. W.S (b)(ix), states: If machinery or equipment is located in two (2) or more counties during the calendar year, the county assessors of the respective counties, or the department of revenue if the assessors cannot agree, shall meet and prorate the assessed valuation of the machinery or equipment among the counties pursuant to rules and regulations promulgated by the department... 32

34 4.5 LEASED EQUIPMENT / DISCOVERY METHODS Leased equipment is taxable in the State of Wyoming, but is often difficult to discover. A section for reporting leased equipment appears on all rendition forms that the division provides. Leased equipment should also be discoverable on business records (books) as a rental or lease expense account and may be discoverable through on-site inspections (audits). In order to help in the discovery, rendition forms should be sent to any leasing company if/when they are discovered from lessee s returns or sales tax lists. Another important method for discovering leased equipment is to mail form letters to all exempt institutions (charitable, church, schools, government, etc.) to inquire on any leased equipment they may be utilizing. Although property owned by a variety of these entities is exempt, all leased furniture, fixtures, and equipment should be reported to the local county assessor as those items are not exempt from taxation. 4.6 RENDITION FORMS (SELF DECLARATION) The rendition forms provided by the division are a self-reporting form and are the primary method available for the discovery of personal property and information required for the valuation of the property. Individual rendition forms are provided by the Department of Revenue for a variety of property categories, including; Oil/Gas Field Equipment, Personal Property for Drilling/Well Service, Personal Property Commercial/Industrial/Agricultural Equipment, Personal Property Proration, Aircraft Affidavits A copy of the rendition forms are available at under the Property Tax Division, Forms Assessment Forms tab. Additionally, county assessors will provide a copy of the previous year s renditions form(s) to all owners of personal property in the county. The forms should be reviewed by the owner and fully completed to include all leased, loaned, expensed, and fully depreciated personal property. When reporting the cost of any piece of equipment the amounts reported should reflect a true accounting of an installed cost including but not limited to; purchase price, freight, sales tax, site preparation, and installation. If personal property was located in more than one county in the prior calendar year, complete and attach the Proration Addendum 25/40 to the corresponding declaration form. A Drilling Rig Movement Notification Form is included with the ATD 39. Wyoming Statute requires that forms be completed and submitted to the county assessors by March 1 st of each year, unless an extension has been requested and granted. For further reading on this requirement refer to Chapter 1, Section 1.2 Wyoming Statute, General Assessment of this manual. 33

35 CHAPTER 5: NATURE OF PERSONAL PROPERTY VALUE 34

36 5.1 CONCEPT OF VALUE Value, in the broadest sense is the relationship between a piece of equipment s desirability, transferability, scarcity, and utility. Additionally, the estimate of market value for ad valorem purposes must be based on the appraisal principal of Highest and Best Use by which a piece of property obtains its maximum value based on its intended use. As outlined by IAAO 2007: Highest and Best Use of personal property determines the most likely future use of property and influences on its current market value. The highest and best use of a property requires it to be appraised as though it were being put to its most profitable use given legal, physical, and financial constraints. 5.2 VALUE IN USE & VALUE IN EXCHANGE The utilization of all approaches to value is based upon the use of like-type properties for all input data regardless of the specific approach to value being utilized. When using an income approach an appraiser must use market income data of like-type properties; when using a sales comparable approach an appraiser must compare similar property in terms of make, model, size, age, capacity, quality, condition, and trade level; when using a cost approach an appraiser must use like-type acquisition costs for similar properties. Wyoming Statute exempts all inventory and/or property held for resale. This exemption, in conjunction with the mandate to appraise all property at its market value dictates that the appraisal of personal property must be at an end-use trade level or consumer level. When appraising personal properties, with the exception of scrap equipment, the principal of highest and best use is used, and therefore market value is synonymous with Value in Use. Value In Use as defined by IAAO 2007: The value of property for a specific use. It embodies the premise that an object s value is related to its use. The value in use concept implies that equipment is installed and in continual use for generating income or performing its function. For the appraisal of personal property, for ad valorem purposes, care must be taken during the collection of sales, cost, or income data to ensure that the information is reflective of a value in use, at a consumer level, versus a Value In Exchange typically indicative of a liquidation sale or other terms or conditions of sale which do not represent the property s highest and best use. Value In Exchange as defined by IAAO 2007: Value in exchange is the amount an informed purchaser would offer in exchange for property under normal market conditions. Value is market determined, based on comparison to other substitute goods and services in a competitive open market. The value in exchange concept implies that the equipment is a commodity and is not installed or, if installed, is to be removed from its present site and reinstalled elsewhere. 35

37 Only under unique and specific circumstances can value in exchange be considered the highest and best use; such as commodities, scrap equipment, replacement parts, etc. Appraisers must use caution when analyzing property based on value in exchange because it often fails to account for additional costs such as freight, installation, taxes, etc. that would be indicative of similar properties purchased by end-user for the intended purposes of that property. 5.3 TRADE LEVELS As defined by IAAO 2007: A trade level refers to the production and distribution stages of a product, which take into consideration the incremental costs such as freight, overhead handling, and installation as property passes from the manufacturing, to the wholesale, to the retail, and ultimately the consumer level. Normally, property increases in value as it progresses through production and distribution channels until it achieves it maximum value at the consumer level. Many industries make use of all three levels. The manufacturer sells to a wholesaler or distributor at manufacturer s price, the distributor then sells at a marked-up distributors price to a retailer who in turn sells at a still higher retail price to the ultimate (consumer) user. As outlined by IAAO 2007: One of the greatest problems in use of the trade level concept occurs when a person manufacturing or holding machinery and equipment operates at more than one level. When manufacturers transfer property to a subsidiary without normal profit and costs, the appraiser must be alert and estimate what it would have cost had it been acquired in an arm s length transaction from an outside supplier. Another method of estimating value would be to estimate the cash price at which the property could be sold in the arm s length transaction to an outside customer. Example: Leasing companies of office equipment (copiers, fax machines, postage meters, etc.), which are located in almost every jurisdiction, have been historically known to report the cost of the machines they own at a manufacturer s trade level below the consumer level which would be the highest and best use of the property and the trade level by which market value is derived. (See Section 4.3) 5.4 MARKET VALUE VS. MARKET PRICE During the valuation process for personal property a vast majority of the data collected is self-reported from individual taxpayers. During this process and through data analysis and interpretation an appraiser must be careful to distinguish between price and value which can be vastly different as reported by a taxpayer. Market Price is defined by IAAO 2007 as: The amount actually paid or about to be paid in a particular transaction. No allowance is made for financing terms, knowledge or prudent conduct on the part of buyer or seller, degree or type of stimulus motivating either or both, use for which the property is best suited or to which it will be put, or length of time the property has been offered on the open market. Market price can be influenced by many factors other than value. 36

38 Market Value is defined by IAAO 2007 as: The most probable price expressed in monetary terms that a property would bring if exposed for sale in the open market in an arm s length transaction between a willing seller and willing buyer, both of whom are knowledgeable concerning all the uses to which it is adapted and for which it is capable of being used. It is a hypothetical or estimated sale price. 37

39 CHAPTER 6: APPRAISAL PROCESS 38

40 6.1 APPROACHES TO VALUE Wyoming statutes state that all property except agricultural land will be valued at its fair market value. Fair Market Value is defined by Wyoming statute (a) (vi) as: Fair market value means the amount in cash, or terms reasonably equivalent to cash, a well informed buyer is justified in paying for a property and a well informed seller is justified in accepting, assuming neither party to the transaction is acting under compulsion, and assuming the property has been offered in the open market for a reasonable time. In order to appraise a property at its fair market value there must first be a market for the property. Fortunately there are three generally accepted value methods used in the assessment of personal property for ad valorem purposes; Cost Approach, Income Approach, and the Sales Comparison Approach. These approaches to value are not equally useful in the valuation of personal property; each approach has inherent strengths and weaknesses. Appraisers must consider all three approaches to value and make an appropriate determination as to which approaches are most applicable, and be able to indicate why any approaches may not be appropriate or utilized for the valuation of a specific type of property. When appraising individual items the best approach to the valuation process is the evaluation of the quantity and quality of data available for each item appraised and then determines the appropriate valuation methods. For mass appraisal, it is not possible to individually analyze each item of personal property separately; however, an appraiser should evaluate what data is available for a larger group of property or segment of property and make an appropriate decision on the valuation method that most accurately estimates market value in a uniform and equitable manner. 6.2 INCOME APPROACH TO VALUE (LEASED EQUIPMENT) & (OBSOLESENCE) The income approach to value is typically the least applicable approach to value for mass- appraisal assignments of personal property, with the exception of leased personal property. Leased equipment may be appropriately valued by estimating the property s ability to generate future income for its owner. If the income approach is used, the terms and conditions of the leases should be collected as part of the annual reporting process by the owners of the equipment. Productivity loss (functional or economic obsolescence) can also be measured using the income approach. An estimated (loss) of value can be measured in these instances through a capitalization process of lost income, similar to the capitalization of rent loss for real property appraisals. Two common applications of the income approach to personal property are; 1) Gross Income Multiplier that relies on the accurate estimation of gross market income, Example of Gross Income Multiplier: You are appraising a piece of equipment which generates $2,800 per month in gross rent. You have discovered the following information regarding comparables. 39

41 Comparables Sale Price Gross Annual Rent Gross Income Multiplier A $245,000 / $33,516 = $7.31 B $260,000 / $35,616 = $7.30 C $299,998 / $41,152 = $7.29 Estimate of subject value: Income x GIM = Value $2,800x12=$33,600 x 7.3 = $245,280 2) Capitalization of Net Income that relies on the accurate estimate of net market income and a capitalization rate made up from the discount rate, the recapture rate, and the effective tax rate. i. The discount rate is the return on the investment and is the investor s compensation for their efforts and risk involved in the investment. The discount rate is made up of an interest rate and an equity yield rate. ii. The recapture rate is the return of investment, which is for capital recovery. In order to determine the recapture rate the appraiser must estimate the years of remaining economic life and convert to a decimal. For example: If a piece of equipment has a 5 year remaining economic life it would be 1/5 = 0.20 iii. The effective tax rate is the actual tax rate multiplied by the assessment level of the taxing jurisdiction. For example: mills (tax rate) x 9.5% (assessment level) = effective tax rate or x = Example of Capitalization of Net Income: A piece of equipment leases for $2,000 per month and has a total economic life of 8 years and is 5 years old. Local information suggests that expenses of 20% are typical. Investment of this nature yields 13% per year, and is located in a jurisdiction indicating mills and an assessment level of 9.5% What is the value of the equipment? Solution: Calculate the Net Annual Income $2,000 per month X 12 months = $24,000 Gross Annual Income Less 20% of $24,000 = - 4,800 Less Expenses $19,200 Net Annual Income Development of the Capitalization Rate Continued on next page. 40

42 Discount Recapture 8-5=3 REL so 1/3= ETR x 0.095= Capitalization Rate Calculation of Market Value NAI/Cap. Rate = $19,200/0.47 = $40,851 The critical point in each of the examples is the estimate of Market income. Intuitively it is understood the economic or market rent levels of property can drastically change from year to year based on internal factors of the property (life expectancy, technology changes, etc.); due to varying lease arrangements (promotions, personal relationships, etc.); and external economic conditions (government regulation, social changes, etc.) Therefore, an appraiser must always take care to ensure that any estimates of market incomes are reflective of the current considerations affecting the value of property. If utilizing the Income Approach to determine value(s) of property select M for the method in RealWare and then enter your appraised value(s). 6.3 SALES COMPARISON APPROACH The sales comparison approach to value estimates a property s value (or some characteristic, such as depreciation) by comparing it to similar properties that have recently sold. This approach relies on the economic principles of supply and demand, substitution, and contribution. The sales comparison approach often has limited reliability in the valuation of personal property because of the limitation of recent and reliable sales data. Furthermore, available sales of used personal property may be the result of liquidation or bulk sales. In these instances the sale may not represent the highest and best use of the property, which in the case of most personal property is a Value In Use and instead be representative of a Value in Exchange. When using a sales comparison approach appraisers must use care to ensure that the property is valued at the proper level of trade. Additionally, if a sales comparison approach is used an appraiser must also be aware of, and make, proper adjustments to the sales price for any trade-in, cash discounts, or other special concessions along with differences in size, age, capacity, quality, condition, and other characteristics. Adjustments are always made to the sales price of the comparable and never the subject property. The proper order of adjustments is 1) Financing and 2) Time of sale. Then other adjustments may be applied (and not in any particular order) such as quality, condition, location, age, size, and other characteristics. The Paired Sales Method is the first step in this approach to value. To develop a time adjustment for example, this procedure requires the appraiser to analyze properties that have similar characteristics but have sold at different times. Or to determine an adjustment for other factors the sales must be similar other than the characteristic being adjusted for. 41

43 Example of a Paired Sales Analysis First Sale (3 years ago) $45,000 Current Sale $50,000 Increase in value over a 3-year period $5,000 $5,000/45,000 = or 11.11% increase over 3 years /3 = or 3.7% Example of a Sales Comparison Approach Assume that we want to value a piece of equipment that is in average condition as of assessment date. The market indicates a 10% negative adjustment for equipment in good condition and a 10% positive adjustment for poor condition. The market also indicates a 1% positive per month adjustment for time on sales that occurred before and a 1% negative per month adjustment for after. Date of sale Condition Sale price Sale 1 5 months before Poor $225,000 Sale 2 10 months after Good $275,000 Sale 3 2 months after Average $235,000 Sale Price Time Adj Time Adj SP Condition Adj Adj SP #1 $225,000 5% $236,250 10% $259,875 #2 $275,000-10% $247,500-10% $222,750 #3 $235,000-2% $230,300 0% $230,300 Based on information above the piece of equipment would be appraised at $230,300, putting the most weight on sale #3 because it had the least amount of adjustments. Suggested items for which the sales comparison approach may be most applicable would be: (Motor Vehicles, Boats, Trailers, Aircraft, Drilling Rigs) On a more limited basis the sales comparison approach may have limited usefulness for items such as: (Heavy Machinery, Farm Equipment, Oil Field Equipment, Furniture and Fixtures) If utilizing the Sales Comparison Approach to determine value(s) of property select M for the method in RealWare and then enter your appraised value(s). 42

44 6.4 COST APPROACH The cost approach, based on the principal of substitution, is the most widely used of the three approaches for the appraisal of personal property because it has broad applicability and readily available data. Replacement costs can be obtained from, but not limited to: Marketplace Sales, Vendor Catalogs, Blue Books, Marshall and Swift, and for oil and gas equipment refer to Appendix #1-3 of this manual. The resulting estimates of value utilizing a cost approach is based on the premise that the cost new of a subject property can be reduced by an amount equivalent to the total loss in value that has occurred through all forms of depreciation. In handling depreciation, the assessor should be aware that the life expectancy of personal property is generally shorter than those of real property. The appraiser should pay close attention to the Descriptions associated to the Life Years and select the corresponding Type in RealWare. (Appendix #4 Personal Property Life Expectancies and Oil Gas Equipment Life Expectancies) The most common estimate of depreciation employed is based on life tables for individual classifications of property types which are prescribed the Wyoming Dept. of Revenue. Personal property suffers physical deterioration. Technological improvements can cause a loss in value to personal property, and this is called functional obsolescence. Economic obsolescence is considered to be a permanent loss in value from outside sources. (Appendix # 4 Depreciation Tables) In the State of Wyoming there are two variations of a cost approach to value that can be utilized by the assessor s offices, in conjunction with the prescribed Computer Assisted Mass Appraisal system (CAMA). Replacement Cost New (R) This variation begins with an estimated replacement cost new (RCN) of property derived from market data or book values of similar properties. Using an (R) approach to cost valuation, no trending or adjustment for inflation/deflation is applied. From the initial estimate of (RCN), an estimate of the total loss in value is made, which is the result of all forms of depreciation (physical, functional, and economic) on the subject property. The resulting value is determined to be the subject property s market value. Example: The subject property is a tractor commonly used in agricultural farming. The property was purchased 3 years ago, and the estimated life expectancy of this tractor, given normal use, is 10 years. Replacement Cost New (Obtained from sales data) = $125,700 Depreciation Estimate (Depreciation Tables Published by the WY. Dept. of Revenue) = 24% or $30,168 Resulting Estimate of Market Value = ($125,700 $30,168) or $95,532. Trended Cost Approach (C) This variation begins with the reported cost of a specific piece of equipment provided by the taxpayer on the annual rendition forms submitted to the assessor s office. This cost is then trended from the date of purchase (acquisition date), or in some instances the date of refurbish or rebuilding of an original piece of equipment, to current day dollars in order to derive an estimate of replacement cost new (RCN). Once the reported costs have been trended, and an estimate of (RCN) is derived, an estimate of the total loss in value is made, which is the result of all forms of depreciation (physical, functional, and 43

45 economic) on the subject property. The resulting value is determined to be the subject property s market value. Care should be taken by the taxpayer and the appraiser to ensure an appropriate reported cost is trended based on the circumstances of ownership for the property. If a property is purchased new, and is used under normal conditions by a single owner, then the original date of purchase, along with the total original cost, represents the data points by which trending should occur. Alternatively, if a used piece of property was acquired at some point after its original date of manufacturing; then the date of acquisition, along with the total acquisition cost, represents the data points by which trending should occur. Additionally, if a piece of equipment is purchased new and used under normal conditions by a single owner, and is refurbished or rebuilt as that equipment reaches the end of its original useful life (changing the effective age of the property). The year of rebuild, along with the cost to refurbish the property should be reported, and would represent the data points by which trending should occur. Example: The subject property is a piece of office furniture, purchased new in 2013, at a total original cost of $10,000. The effective age of the property is 4 years old with a total estimated life expectancy of 10 years, given normal use. Original Cost = $10,000 Trending Factor (Trending Tables Published by the WY. Dept. of Revenue) = (1.0201) Estimated Replacement Cost New (RCN) = ($10,000 x ) or $10,201 Depreciation Estimate (Depreciation Tables Published by the WY. Dept. of Revenue) = 33% or $3, Resulting Estimate of Market Value = ($10,201 $3,366.33) or $6, Effective Age defined by IAAO 2007: It is the number of years of age of the subject property as indicated by its condition. It is the difference between total economic life and the remaining economic life. If the property has experienced better than average maintenance, its remaining economic life can be extended, therefore, its effective age may be less than the actual age; if there has been inadequate maintenance, it may be greater. When possible, the appraiser should attempt to determine remaining economic life and can then estimate effective age. When the condition of the equipment is unknown, caution is advised to assume the effective age to be the same as actual age. Applying an effective age in RealWare At this time the CAMA system does not have the capability to enter an effective age in the Personal Property or Oil & Gas modules. For the tax year 2018 this will be available in the Oil & Gas module. Therefor a simple work around may be utilized and consists of adjusting the Acquisition Year to adjust the depreciation appropriately. Remaining Economic Life (REL) defined by IAAO 2007: It is the number of years from the date of the appraisal to the date when the property becomes economically valueless (end of its economic life). Estimation of REL is the most important step in the calculation of accrued depreciation, since it is the basis from which remaining utility is estimated. 44

46 Total Economic Life (TEL) defined by IAAO 2007: It is an estimated number of years that a property contributes to its total value. This period begins when the property is new and ends when it no longer contributes positively to its overall value. Actual Age defined by IAAO 2007: It is the amount of time elapsed since the property was first built. It is a fact, not an estimate. Additional Depreciation: Under certain scenarios a property may suffer additional deprecation based on functionality, or external factors. In these instances the reporting entity should work closely with the appraiser and provide supporting evidence of the existence of additional depreciation which may be further deducted from the resulting age-life estimates. Change in Use: If a property has been fully depreciated and is no longer capable of being utilized for its intended use, and is disposed of, the reporting entity should remove this equipment from its asset lists. However, if the property is not disposed of and instead the intended use of the property has changes, (i.e. scrap parts, decoration / art, etc.) care should be taken by the reporting entity to indicate the new use of the property. Residual Value: Wyoming Department of Revenue Rules & Regulation Chapter 9 Section 5(c)(i)(D)(II) states: Depreciation shall continue to be applied until the residual value is reached. The residual value shall be considered to be no less than twenty percent (20%) for all personal property, unless the property tax appraiser has collected sufficient market information to indicate a different residual value. When a property s value depreciates to 20% good, that value then is described as Residual Value and typically it is no longer being used as intended to be. For example, once a tractor reaches the end of its economic life it s more than likely sold for scrap iron. In these instances the property does still have a taxable value; however its highest and best use may have changed from a Value in Use to a Value in Exchange in which case a market comparison approach to value may be more appropriate than a cost approach. Rebuilt/Refurbished Property: Personal property is often rebuilt / refurbished (in a manner exceeding normal maintenance) in order to extend its useful life for the purposes for which it was originally acquired. When property has been reconditioned to extend its remaining economic life the property should be treated as new or almost new and valued at a new estimated cost. In these instances the reported cost should include all cost incurred to recondition / rebuild the property (plus) the value of the item at the time of reconditioning. Example: You are appraising a piece of agriculture equipment acquired 15 years ago for a total of $15,000 with an estimated life expectancy of 10 years. Further research indicates this equipment was refurbished in 2011 for a total of $22,500 and had a market value of $4,350. You have determined the effective age to be 5 years. Market Value at Time of Refurbishment = $ 3,000 Refurbishment Cost = $22,500 Total = $25,500 Trending Factor for 2011 (Appendix 4.2-Trending Tables) =

47 Estimated Replacement Cost New (RCN) = $25,500 x or $26, Eff Age is 5 Years and Life Expectancy is 10 Years (Appendix 4.1-Life Table) Depreciation Estimate (Appendix 4.3-Depreciation Tables) = 42% or $11, Resulting Estimate of Market Value = ($26, $11,327.97) or $15, Condition Factors: The condition codes listed in the oil & gas section are specific to oil and gas equipment. When applying Market costs from Appendix 1, 2 & 3 you are already considering condition therefore, ensure that the M method and Average condition selections are keyed into RealWare which results in no adjustment being applied to RCN. If you are using acquisition costs or RCN costs provided by owner, enter appropriate condition factor in RealWare. Condition selections below Average will adjust the depreciation negatively and selections above Average will adjust the depreciation positively. 6.5 RECONCILIATION OF VALUE The final step in the appraisal process is the reconciliation of the three approaches used in the estimation of market value. As previously stated an appraiser must consider all three approaches to value during the appraisal process. During the reconciliation process an appraiser will consider the various estimates of value based on the three approaches, weigh the inherent strengths and weaknesses of each approach, and their relevancy to the subject property. A final estimate of value will then be made based on this reconciliation of the three estimates of value. Appraisers should never simply average multiple value indicators but instead make a studied and appropriate determination based on the supportable data and considerations of fact. 46

48 APPENDIX - 1: OIL & GAS DRILL RIGS, DRILL PIPE & COLLARS 47

49 A 1.0 MARKET COMMENTS The overall drilling and well service outlook for late 2016 is starting to show signs of slight stabilization as the future of the industry depends on fluctuating oil and gas prices. The energy industry continues to face many external pressures and obstacles. In 2016, most of the equipment values are down some 5% to 15% from We expect this trend change in 2017 as the market continues to stabilize. A- 1.1 NOTE TO ASSESSORS The Drilling Rig Section of this manual is designed for use with both Oil & Gas Exploration Equipment. The values in this manual are to be used as a guide. Economic conditions in your area may warrant adjustments to the values listed in this manual. A 1.2 CONDITION OF EQUIPMENT It should be noted that when determining conditions, the appearance of the particular item is important. However, the equipment must be judged on mechanical and electrical working conditions and not just on appearance. Paint, lubrication and general cleanup should be part of general maintenance and should not be used to cover up defective equipment. The appraiser must use experience and firsthand knowledge of the equipment to make accurate judgments for condition ratings. An appraiser must give consideration to several factors in determining condition. The physical condition, deterioration, depreciation or state of repair is a major factor in values. Loss of value due to curable or incurable depreciation is a consideration of market value. These are not the only conditions but represent the majority of determinations when setting value(s). Condition Codes of Equipment: (NW or Ex): New or Excellent; New mechanical condition, extremely low hours of use, no defects and potentially still under warranty. (VG): Very Good; May have been recently overhauled or rebuilt with new or nearly new material and/or has had such limited use that no repairs or parts replacement is necessary. Very low hours of use. (GD): Good; In complete operating condition. No known or obvious mechanical defects but may have some minor worn parts that will need repair or replacement in the near future. May have higher hours and the need for replacement in the near future, but no defects are obvious. (FR): Fair; Has very high hours or extended use. Defects are obvious and will require repair or general rebuild soon. Less than 100% functional or efficient and may be questionable. (PR): Poor; Has a very high number of service hours. Requires rebuild, repair, or overhaul before it can be used. Not operational or functional. (SA OR SC): Salvage or Scrap; Cost of repairs exceed value or cost of replacing with like equipment. Past useful life and should be sold as scrap. 48

50 Notes: Working drilling rigs are usually at least in good conditions. Using a Good Condition rating is a reasonable assumption unless the rig is known to be new or newly refurbished bringing the condition rating to very good excellent. It may be possible to see operating rigs in fair condition if they are finishing a job before going to be repaired or rebuilt. OSHA requires all oil and gas field equipment to be in satisfactory, normal, safe operating condition or sound mechanical working condition. Rigs in poor condition are not operational and should not be found working in the field. Rigs in poor condition are usually considered as scrap or salvage. Rigs in poor condition are usually scavenged for parts to support other rigs. At this point they are not really rigs, just a collection of parts. Scrap or Salvage Rigs: For scrap or salvage rigs, the weight should be estimated and multiplied by.025 per pound. Rebuilt Rigs: Rebuilding rigs puts a typical rig that is in fair to poor condition back to very good condition, or excellent condition. A complete rebuild includes inspections of all major components including drill pipe, and repair or replace of components; zero hour engines, pumps, drawworks, rotating & handling equipment to API specifications. Certifications, rig up and testing are included. A-1.3 DRILLING RIG VALUATION The valuation of drilling rigs involves several determinations and considerations regarding make & model, power source, depth rating, and condition. Drilling rig valuations are an inclusion of numerous individual components that are used as a complete operating system and are inclusive of the specific rig values. Examples of these components include: Derricks & Substructures, Draw works & Engine Instruments, Slush Pumps, Mud Pumps, Mud Tanks, Fuel Tanks, Generators, Boilers, Fed pumps, Elevators, Kelly, Rotary Table, Blowout Preventers, Tools & Supplies, Drilling Lines & Sand Lines, Rotary Hose & Standpipe, Hook, Tongs, Swivel, Crown Block, Traveling Block, Water Systems. Typically, no rigs rated over 30,000 Ft. will be found in our areas. Any rig rated at or over 30,000 Ft. should be handled as an exception. Notes: Drilling Rigs, Top Drive Systems, and Drill Pipe & Drill Collars should be valued separately. Stacked rigs should be valued and assessed. If a rig has been stacked for 6+ months you may want to give a 15% adjustment for economical obsolescence and/or physical deterioration. If the rig has been stacked for (1) + years you may want to allow a 25% reduction. 49

51 A 1.4 MODEL / DEPTH TABLE & CAPACITY GUIDELINE The model/depth table may be used as a guideline to determine the depth corresponding to the draw works and model number. Also, individual rig information can often be located on the manufacturers or operators web page. If no information can be located use Best Information Available (BIA). Example: Subject rig is a Bethlehem MC450. In the model / depth table find the Bethlehem MC450. The corresponding capacity is 700 Horse Power, and Maximum Depth is 10,000 feet. This reference information would then be used in conjunction with the drilling rig valuation tables. Based on a depth capacity of 10,000 ft. an appraiser could reference a depth capacity of (7,500 10,000) or (10,001 12,500) providing an estimated range of values based on the condition of the rig. MODEL/DEPTH TABLE MANUFACTURER INPUT HP DEPTH RATING B.D.W. 450T B.D.W. 650M ,000 B.D.W. 800MI 1,000 13,000 B.D.W. 800MX 1,000 13,000 B.D.W. 1350M ,000 BEAUMONT IRON WORKS DREADNAUGHT ,000 BETHLEHEM ZEPHYR 180 3,000 BETHLEHEM BREEZE 180 3,000 BETHLEHEM MC ,000 BETHLEHEM MC ,500 BETHLEHEM S45E 300 6,000 BETHLEHEM C ,000 BETHLEHEM TWISTER 400 7,500 BETHLEHEM WHIRLWIND 400 7,500 BETHLEHEM M ,000 BETHLEHEM S ,000 BETHLEHEM M ,000 BETHLEHEM MC ,000 BETHLEHEM M810 1,050 10,000 BETHLEHEM MC 650 1,000 12,500 BETHLEHEM ,500 13,000 BETHLEHEM MC950 1,400 15,000 BETHLEHEM MC ,200 25,000 BETHLEHEM B3661 2,100 30,000 BHARAT HEAVY ELECT LTD E 760 1, BHARAT HEAVY ELECT LTD E1400 1,400 16,000 BHARAT HEAVY ELECT LTD E2000 2,000 20,000 50

52 MODEL/DEPTH TABLE (CONTINUED) MANUFACTURER INPUT HP DEPTH RATING BREWSTER N ,000 BREWSTER N ,500 BREWSTER 70B 150 3,500 BREWSTER N-4A 350 5,000 BREWSTER N ,500 BREWSTER N ,500 BREWSTER N ,000 BREWSTER N ,500 BREWSTER N ,000 BREWSTER N ,000 BREWSTER N95 1,200 14,000 BREWSTER N12 1,500 18,000 BREWSTER NE12 1,500 18,000 BREWSTER NE2500 2,500 25,000 BREWSTER N20 2,000 25,000 CARDWELL MODEL H 150 2,500 CARDWELL MODEL L 175 3,500 CARDWELL MODEL K 175 3,500 CARDWELL MODEL S 350 4,500 CARDWELL MODEL R 350 4,500 CARDWELL MODEL G 350 4,500 CARDWELL L ,500 CARDWELL MODEL D 400 5,000 CARDWELL J ,000 CARDWELL MODEL O 600 8,000 CARDWELL J ,000 CARDWELL KH ,000 CARDWELL KH1000 1,000 14,000 CONJUNTO MANUFACTUERO MC ,000 CONJUNTO MANUFACTURERO MC ,000 CONJUNTO MANUFACTURERO MC ,500 CONJUNTO MANUFACTURERO MC ,000 CONJUNTO MANUFACTURERO MM900 1,000 10,000 CONJUNTO MANUFACTURERO MM1200 1,200 13,000 CONJUNTO MANUFACTURERO ME1200 1,200 13,000 CONJUNTO MANUFACTURERO MM1700 1,700 17,000 CONJUNTO MANUFACTURERO ME1700 1,700 17,000 CONJUNTO MANUFACTURERO ME2100 2,000 21,000 CONJUNTO MANUFACTURERO ME2100S 2,000 21,000 CONJUNTO MANUFACTURERO ME3000 4,000 35,000 51

53 MODEL/DEPTH TABLE (CONTINUED) MANUFACTURER INPUT HP DEPTH RATING CONTINENTAL EMSCO GB ,000 CONTINENTAL EMSCO GB ,000 CONTINENTAL EMSCO GC ,500 CONTINENTAL EMSCO WS ,000 CONTINENTAL EMSCO D ,000 CONTINENTAL EMSCO GC ,000 CONTINENTAL EMSCO A ,000 CONTINENTAL EMSCO D ,000 CONTINENTAL EMSCO A 800 1,000 12,500 CONTINENTAL EMSCO D-3 TYPE III 1,000 12,500 CONTINENTAL EMSCO D-3 TYPE II 1,000 12,500 CONTINENTAL EMSCO A ,400 16,000 CONTINENTAL EMSCO C-1 TYPE III 1,500 16,000 CONTINENTAL EMSCO C-1 TYPE II 1,500 16,000 CONTINENTAL EMSCO ELECTROHOIST II 2,100 18,000 CONTINENTAL EMSCO A1500 1,800 25,000 CONTINENTAL EMSCO 1500E 2,000 25,000 CONTINENTAL EMSCO C-2 TYPE III 2,000 25,000 CONTINENTAL EMSCO C-2 TYPE I 2,000 25,000 CONTINENTAL EMSCO C-2 TYPE II 2,000 25,000 CONTINENTAL EMSCO C-3 TYPE IV 3,000 30,000 CONTINENTAL EMSCO C-3 TYPE III 3,000 30,000 CONTINENTAL EMSCO C-3 TYPE II 3,000 30,000 CONTINENTAL EMSCO C-3 TYPE I 3,000 30,000 CONTINENTAL EMSCO CE ,000 30,000 CONTINENTAL EMSCO ELECTROHOIST III 4,200 30,000 COOPER D ,000 COOPER ,000 DRECO 1000 M/E 1,000 14,000 DRECO 1500 M/E 1,500 18,000 DRECO 2000 M/E 2,000 22,000 DRECO 3000E 3,000 30,000 DRECO 4000E 4,000 50,000 EMSCO GA ,500 EMSCO GA ,000 EMSCO J ,000 EMSCO JB ,250 14,000 EMSCO JO1600 1,600 18,000 EMSCO J2000 2,000 20,000 52

54 MODEL/DEPTH TABLE (CONTINUED) MANUFACTURER INPUT HP DEPTH RATING FAILING ,000 11,000 FRANKS SA ,500 FRANKS SAL ,000 FRANKS SG ,000 FRANKS SG ,000 GARDNER DENVER 500 M&E 650 9,000 GARDNER DENVER 700 M&E ,000 GARDNER DENVER 800 M&E 1,000 12,000 GARDNER DENVER 1000S ,000 GARDNER DENVER 800 E 1,000 12,000 GARDNER DENVER 1100 M&E 1,500 16,000 GARDNER DENVER 1500 M&E 2,000 21,000 GARDNER DENVER 2100 M&E 2,500 21,000 GARDNER DENVER 150QE 2,000 21,000 GARDNER DENVER 2100E 2,500 21,000 GARDNER DENVER 3000E 3,000 30,000 HANIEL & LUEG F ,000 HANIEL & LUEG F ,000 HANIEL & LUEG F-16 1,100 12,500 HANIEL & LUEG F-20 1,500 16,000 HANIEL & LUEG F-30 2,000 20,000 HOPPER TYPE G 400 5,000 HOPPER TYPE M 500 6,000 HOUSTON SYSTEMS HD1500E 1,500 15,000 HOWARD TURNER DA ,500 IDECO PR ,000 IDECO H ,000 IDECO H ,000 IDECO H ,000 IDECO H ,000 IDECO H ,500 IDECO H ,500 IDECO H ,500 IDECO H ,500 IDECO M-750 OR H ,000 IDECO M-750 OR H750 SUPER 900 9,500 IDECO LUCKY 7/ ,000 IDECO H-900 1,000 10,000 IDECO ED 900 1,000 10,000 IDECO H-1000 M/E 1,100 10,000 IDECO H- 7/11 1,200 12,000 IDECO H1200 &ED1200 1,200 13,000 53

55 MODEL DEPTH TABLE (CONTINUED) MANUFACTURER INPUT HP DEPTH RATING IDECO 1700E 1,700 17,000 IDECO SUPER 7/11 1,500 17,000 IDECO PR1050 1,500 17,000 IDECO 1700E 1,700 17,000 IDECO SUPER 7/11 1,700 17,000 IDECO PR ,600 18,000 IDECO BIG GIANT 2,000 20,000 IDECO JUNIOR H-2500/ M-2500/ E ,800 21,000 IDECO 1350S 1,800 21,000 IDECO H2100M H2100E S2100 2,000 21,000 IDECO H2500/ M2500/ E2500 3,000 25,000 IDECO H3000/ E3000/ ES3000 4,000 30,000 MESA ,500 12,000 MID CONTINENT U34/ U34B/ U34D 350 4,500 MID CONTINENT U34 E & U34 B 400 4,500 MID CONTINENT U ,500 MID CONTINENT U-36 & U36EA/ U36E 600 7,500 MID CONTINENT U ,000 MID CONTINENT U-712/ U712A/ U712EA 1,200 12,000 MIN CONTINENT U-914/ U914EA/ U914C 1,400 14,000 MID CONTINENT U-220/ U220B/ U1220EB 2,000 4,500 MID CONTINENT U-34BD 350 4,500 INDUSTRIA DEL HERRO IH-M ,200 INDUSTRIA DEL HERRO IH-M ,836 INDUSTRIA DEL HERRO IH ,000 13,115 INDUSTRIA DEL HERRO IH ,500 16,395 INDUSTRIA DEL HERRO IH ,000 19,670 INDUSTRIALEXPORTIMPORT TF ,000 INDUSTRIALEXPORTIMPORT TF ,600 INDUSTRIALEXPORTIMPORT TF ,600 INDUSTRIALEXPORTIMPORT TF15-E 1,000 6,600 INDUSTRIALEXPORTIMPORT TF ,200 INDUSTRIALEXPORTIMPORT TF-20-E 1,200 9,200 INDUSTRIALEXPORTIMPORT TF-25 1,350 13,200 INDUSTRIALEXPORTIMPORT TF25-E 1,600 13,200 INDUSTRIALEXPORTIMPORT TF28 1,750 16,500 INDUSTRIALEXPORTIMPORT TF38 2,000 19,700 INDUSTRIALEXPORTIMPORT TF38, TF 38-E 2,300 19,700 INDUSTRIALEXPORTIMPORT TF45 2,000 23,000 INDUSTRIALEXPORTIMPORT TF44 & 44E 3,000 23,000 INDUSTRIALEXPORTIMPORT TF77-E 4,300 40,000 INDUSTIRIALEXPORTIMPORT TF86-E 4,500 50,000 54

56 MODEL/DEPTH TABLE (CONTINUED) MANUFACTURER INPUT HP DEPTH RATING MAREP (CONTINENTAL EMSCO LICENSEE) GB ,000 MAREP (CONTINENTAL EMSCO LICENSEE) A800 1,000 12,500 MAREP (CONTINENTAL EMSCO LICENSEE) A1100 1,400 16,000 MASSARENTI MAS 2500 & ,000 MASSARENTI MAS ,000 13,000 MASSARENTI MAS ,500 17,000 MASSARENTI MAS ,800 20,000 MASSARENTI MAS ,500 25,000 MID CONTINENT U-34, B,D 350 4,500 MID CONTINENT U-34E & EB 400 4,500 MID CONTINENT U ,500 MID CONTINENT U-36,A 600 7,500 MID CONTINENT U-36EA 600 7,500 MID CONTINENT U ,000 MID CONTINENT U-712,A 1,200 12,000 MID CONTINENT U-712EA 1,200 12,000 MID CONTINENT U-914,C 1,400 14,000 MID CONTINENT U-914EC 1,400 14,000 MID CONTINENT U-1220, B 2,000 20,000 MID CONTINENT U-1220EB 2,000 20,000 NATIONAL T ,000 NATIONAL T ,000 NATIONAL T ,000 NATIONAL T ,500 NATIONAL 50A 450 7,000 NATIONAL 370M & 370E 550 7,000 NATIONAL T ,500 NATIONAL 55 & 55P 700 9,000 NATIONAL 75 CA 650 9,500 NATIONAL 610M & 610E ,000 NATIONAL ,000 NATIONAL ,000 NATIONAL 80B & 80DMB 7 80UE & 80DBE 1,000 12,000 NATIONAL 820 1,200 15,000 NATIONAL 110/ 110M/ 110MB/ 110UE/110EH 1,500 16,000 NATIONAL 130 1,625 20,000 NATIONAL 160 2,010 20,000 NATIONAL 1320M/ 1320DMB/ 1320UE/ 1320DBE 2,000 20,000 NATIONAL 1625M/ 1625M/ 1625DE 3,000 25,000 NATIONAL 1630E/ 1630DMB 3,000 30,000 NATIONAL 2050E 4,000 50,000 55

57 MODEL/DEPTH TABLE (CONTINUED) MANUFACTURER INPUT HP DEPTH RATING O.I.L ,000 O.I.L.711M ,000 O.I.L.711E 1,100 15,000 O.I.L. 1520E 2,000 22,000 OIL WELL 52-T 400 6,000 OIL WELL 64-B 500 6,000 OIL WELL 500M 500 7,000 OIL WELL 500E 500 7,000 OIL WELL 76M ,000 OIL WELL 76E ,000 OIL WELL 760M 1,000 12,000 OIL WELL 760E 1,000 12,000 OIL WELL 840M 1,300 16,000 OIL WELL 840E 1,400 16,000 OIL WELL 860M 1,400 16,000 OIL WELL 860E 1,400 16,000 OIL WELL E2000 2,000 20,000 O.I.M.E. 750SL 750 7,500 O.I.M.E. 1000SL 1,000 10,000 O.I.M.E. SL ,000 O.I.M.E. SD5-M ,000 O.I.M.E. SDS-E ,000 O.I.M.E. SL-7 1,200 12,000 O.I.M.E. SD7-M 1,200 12,000 O.I.M.E. 1500SL 1,500 15,000 O.I.M.E. SD9-M 2,000 20,000 O.I.M.E. SL-9P 2,000 20,000 O.I.M.E. SD-9E 2,000 20,000 O.I.M.E. SD11-E 3,000 25,000 R.M.I. D ,500 R.M.I. D42-550E 550 7,500 R.M.I. D46-750,E ,000 R.M.I. D ,E 1,000 15,000 R.M.I. D ,E 2,000 24,000 56

58 MODEL/DEPTH TABLE (CONTINUED) MANUFACTURER INPUT HP DEPTH RATING SKYTOP BREWSTER N42A 450 5,000 SKYTOP BREWSTER N ,500 SKYTOP BREWSTER N ,000 SKYTOP BREWSTER NE ,000 SKYTOP BREWSTER N75M 1,000 12,000 SKYTOP BREWSTER N75E 1,000 12,000 SKYTOP BREWSTER SB-1000E 1,000 12,000 SKYTOP BREWSTER SB ,000 12,000 SKYTOP BREWSTER SB-1500,E 1,500 16,000 SKYTOP BREWSTER N95M 1,700 16,000 SKYTOP BREWSTER N95E 1,700 16,000 SKYTOP BREWSTER NE95 1,700 16,000 SKYTOP BREWSTER 12AE 1,500 18,000 SKYTOP BREWSTER NE-12A 2,000 21,000 SUPERIOR 200PSD 200 2,000 SUPERIOR 300 PSD 300 3,500 SUPERIOR 400 PSD 400 5,000 SUPERIOR 500 PSD 500 7,500 SUPERIOR 700 PSD 700 9,000 SUPERIOR 700 UE 700 9,000 SUPERIOR ,000 SUPERIOR 700E 700 9,000 SUPERIOR 700UE 700 9,000 SUPERIOR 1000E 5,000 12,000 SUPERIOR 100UE 5,000 12,000 TEXAS IRON WORKS CT ,500 TRAUZL-WERKE (CARDWELL LICENSEE) L ,500 TRAUZL-WERKE (CALDWELL LICEVSEE) J ,000 TRAUZL-WERKE (CALDWELL LICENSEE) J ,000 UNIT RIG U ,500 UNIT RIG U ,500 UNIT RIG U ,500 UNIT RIG U ,000 UNIT RIG U-30 1,400 20,000 UNIT U-36A 600 7,500 UNIT U36EA 600 7,500 UNIT U-712 2,000 12,000 VILLARES ,000 VILLARES 660,E 700 9,000 VILLARES 700,E 700 9,000 VILLARES 760,E 1,000 12,000 VILLARES 840E 1,400 16,000 VILLARES 860 1,400 16,000 VILLARES M,E2000 2,000 20,000 VILLARES M,E3000 3,000 30,000 57

59 MODEL/DEPTH TABLE (CONTINUED) MANUFACTURER INPUT HP DEPTH RATING WAGNER-MOREHOUSE D15-34B 200 2,000 WAGNER-MOREHOUSE T-34S 200 2,000 WAGNER-MOREHOUSE T ,500 WAGNER-MOREHOUSE D15-38B 250 3,000 WAGNER-MOREHOUSE T ,500 WAGNER-MOREHOUSE D15-40B 350 4,500 WHELAND B ,500 WHELAND B ,000 WICHTEX R ,000 WICHTEX R ,500 WICHTEX R ,000 WICHTEX R ,000 WILSON 30 S/D 275 3,000 WILSON ,200 WILSON 3500, ,500 WILSON 38 S/D 400 3,800 WILSON MOGUL ,800 WILSON ,500 WILSON 75 P,H,EH 600 7,500 WILSON ,500 WILSON ,500 WILSON MOGUL ,500 WILSON GIANT 700 8,000 WILSON SUPER GIANT 900 9,000 WILSON ,000 WILSON ATLAS ,000 WILSON SUPER ATLAS 1,100 11,000 WILSON 120 1,100 12,000 WILSON 120 H, EH 1,100 12,000 WILSON TITAN 1,100 12,000 WILSON 150 1,350 15,000 WILSON 150A 1,650 15,000 WILSON SUPER TITAN 56 1,650 15,000 WILSON SUPER TITAN 66 1,500 22,000 WILSON 250 2,000 22,000 WIRTH GH ,000 WIRTH GH ,200 WIRTH GH ,120 WIRTH GH1400 1,400 19,680 WIRTH GH1200 1,400 20,000 WIRTH GH2000 1,600 20,000 WIRTH GHM2200 2,200 21,500 WIRTH GHM2000E 2,400 21,500 WIRTH GH3000E 3,000 21,500 WIRTH GH3000 3,000 21,500 58

60 A 1.5 DRILLING RIG VALUATION TABLES RealWare 14 Yr. Life Rig Values are (M) Market. Do Not Apply Depreciation. DEPTH POOR FAIR GOOD V. GOOD EXC Up to 2500 Standard $25,000 $72,000 $98,000 $191,000 $295,000 Hydraulic $25,000 $85,000 $110,000 $215,000 $325,000 Electric (AC) $25,000 $100,000 $145,000 $275,000 $415, to 5000 Standard $30,000 $85,000 $318,000 $510,000 $595,000 Hydraulic $30,000 $100,000 $365,000 $525,000 $675,000 Electric (AC) $30,000 $125,000 $415,000 $675,000 $825, to 7500 Standard $50,000 $225,000 $510,000 $638,000 $1,100,000 Hydraulic $65,000 $245,000 $575,000 $725,000 $1,300,000 Electric (AC) $70,000 $295,000 $695,000 $850,000 $1,600, to 10,000 Standard $95,000 $375,000 $935,000 $1,190,000 $1,785,000 Hydraulic $100,000 $425,000 $1,000,000 $1,250,000 $1,800,000 Electric (AC) $125,000 $525,000 $1,200,000 $1,450,000 $2,000,000 10,001 to 12,500 Standard $165,000 $595,000 $1,785,000 $2,550,000 $3,400,000 Hydraulic $195,000 $685,000 $1,985,000 $2,650,000 $3,650,000 Electric (AC) $200,000 $700,000 $2,100,000 $2,950,000 $3,850,000 12,501 to 15,000 Standard $300,000 $1,130,000 $3,145,000 $4,165,000 $5,525,000 Hydraulic $350,000 $1,200,000 $3,500,000 $4,500,000 $5,750,000 Electric (AC) $375,000 $1,275,000 $3,850,000 $4,850,000 $6,250,000 59

61 DEPTH POOR FAIR GOOD V. GOOD EXC 15,001 to 17,500 Standard $325,000 $1,330,000 $3,600,000 $5,225,000 $7,600,000 Hydraulic $385,000 $1,400,000 $3,950,000 $5,500,000 $8,000,000 Electric (AC) $400,000 $1,450,000 $4,100,000 $5,850,000 $8,500,000 17,501 to 20,000 Standard $475,000 $1,800,000 $4,000,000 $5,900,000 $8,400,000 Hydraulic $500,000 $1,900,000 $4,200,000 $6,000,000 $9,200,000 Electric (AC) $550,000 $2,000,000 $4,500,000 $6,250,000 $9,975,000 20,001 to 25,000 Standard N/A N/A N/A N/A N/A Hydraulic N/A N/A N/A N/A N/A Electric (AC) $575,000 $1,360,000 $3,315,000 $5,100,000 $8,330,000 25,001 to 30,000 Standard N/A N/A N/A N/A N/A Hydraulic N/A N/A N/A N/A N/A Electric (AC) $625,000 $1,975,000 $4,800,000 $7,000,000 $9,500,000 Notes: Rigs made in China are not discounted. Major components of standard rigs are now mixed with Chinese components. Typically rigs with depth capacity in excess of 15,000 ft. are SCR Electric or SCR Silicone Control Rectifiers. Rigs with all A/C Power require a deduction of 10%. Rigs with partial A/C Power & Diesel Power backup require an addition of 10%. Verify contractor s provided depth rating. Check the manufacturer s specifications. The depth rating of a rig is controlled by the drawworks, and is designed for a certain depth rating by the manufacturer using typical standard drill pipe (4 ½ Grade E, lbs. per ft.). However, it may be common for drilling contractors to over rate their rigs depth rating by as much as 30%. In a survey taken in 2002 it was found that 70% of rig owners had incorrect depth rating for their rigs when compared to manufacturer s specifications. The engineered depth rating is the manufacturers recommended safe and economical operating depth range. 60

62 A 1.6 TOP DRIVES A Top Drive is a hydraulic or electric motor suspended in the derrick (mast) of a drilling rig which rotates the drill string and bit and is used in the actual process of drilling the well. Using a Top Drive eliminated the need for the traditional (Kelley) or Rotary Table, and reduces the amount of manual labor and associated hazards that have traditionally accompanied this task. A top drive is capable of drilling with three joints stands, instead of just one pipe at a time. Top drives typically decrease the frequency of stuck pipe, which contributes to cost savings. A top drive allows drillers to more quickly engage and disengage pumps or the rotary while removing or restringing the pipe. Top drives are also preferable for challenging extended-reach and directional drilling. Notes: The values are provided using a medium price for either the Hydraulic or Electric Motor. The reason the values are reported in such a manner is that there is very little difference in the value between the two types. 61

63 RealWare 14 Yr. Life Top Drive Values are (RCN) TONS DOMESTIC IMPORTS 175 $600,000 $475, $650,000 $500, $750,000 $575, $775,000 $650, $1,250,000 $1,000, $1,650,000 $1,350,000 PRICE INCLUDES RAILS, CONTROLS, POWER UNIT & INSTALLATION Notes: Total useful life is estimated at yrs. with a rebuild being completed every 3 yrs. Top Drive Value Must Be Added Separately. If a drilling rig is found to operate with a top-drive system, the associated value of the top drive listed above, is separate from, and should be added to the indicated values based on depth capacity. A 1.7 COIL TUBING DRILLING RIGS W/OUT DRILL TUBING Coil tubing drilling is another means to drill vertical wells that is typically more labor friendly with quicker turn-around times because of the smaller design requiring less time for rigging up / down. Additionally, once the coil tubing begins drilling into the subsurface it is a continual process with no joints to make until the target depth is reached. All drill pipe is eliminated by means of the coil tubing. Coiled tubing rigs are usually truck or trailer mounted for rapid deployment and to work in places where larger rigs might not be practical. These rigs normally take 3 trucks to haul them, one will have the coil, one will have the head and the other one will have the circulation system mounted on them. It must be noted however, that some coil tubing drilling rigs are not truck mounted. Although coil tubing rigs can be used for initial drilling of wells it is common for these rigs to be used for existing well servicing and work-over projects. 62

64 RealWare 14 Yr. Life Rig Values are (M) Market. Do Not Apply Depreciation. DEPTH RATING POOR FAIR GOOD V GOOD EXCELLENT UP $15,000 $100,000 $185,000 $250,000 $350, $25,000 $250,000 $350,000 $500,000 $675, $75,000 $295,000 $625,000 $785,000 $1,000, ,000 $95,000 $350,000 $925,000 $1,300,000 $1,750,000 10,001-12,500 $175,000 $800,000 $1,750,000 $2,225,000 $2,295,000 12,501-15,000 $250,000 $1,300,000 $2,795,000 $3,125,000 $4,500,000 15,000-17,500 $300,000 $1,400,000 $3,200,000 $4,250,000 $5,000,000 Over 17,500 $375,000 $2,500,000 $3,975,000 $4,500,000 $5,750,000 Notes: Values do not include the coiled tubing, just as standard rigs do not include drill pipe or collars. The department is unaware of coiled tubing land drilling rigs rated for depths over 12,000. Coiled tubing drilling rigs DO NOT meet the criteria of mobile machinery. A 1.8 DRILL PIPE Drill pipe may consist of new, premium, yellow band, structural and scrap with rigs or in yards. In general if you find pipe and/or collars that are mixed in size, type, weight, grade or condition on the same well they should be downgraded. Grade E is the most common grade of drill pipe found today. (Premium / Double White Band): The pipe has been inspected using API inspection equipment. Inspection papers must be dated in the past 12 months and pipe must not have been used since the inspection date. (Yellow Band / Uninspected): This pipe may still be suitable for drilling but may have not been inspected since its last use and would not have the inspection papers required for a premium grade. 63

65 (Structural): This pipe is usually rejected pipe from an inspection and is no longer safe for use in drilling. (Scrap): Scrap pipe in not suitable for use as structural use or may represent small quantities of structural quality pipe. (Standard Pipe Size): A standard joint of pipe is 31, 2 per joint. HB = Hard Banded on the outside of the pipe. PC = Plastic Coating on the inside of the pipe. OD = Outside Diameter Notes: Drill pipe is not included in the estimated value of drilling rigs and must be added separately. Notes: NEW DRILL PIPE RealWare 6 Yr. Life Values are (RCN per Ft.) (PRICE ROUNDED (Std +2 with HB & PC) SIZE/WGHT/GRADE RCN 2 ⅜ X 6.65#E $ ⅜ X 6.85# E $ ⅞ X 10.40#E $ ½ X 9.50# E $ ½ X 13.30#E $ ½ X 15.50# E $ X 14.00# E $ X 15.70# E $ ½ X 16.60#E $ ½ X 20.00# E $ ½ X 22.82# E $ X 19.50# E $ X 25.60# E $ X 34.01# E $ ½ X 21.90#E $ ½ X 24.70# E $ ⅝ X 25.20#E $ ⅝ X 27.70# E $42.49 New Drill Pipe prices includes grade E only. This is the most common grade. Other grades would have higher prices. For easy use in the field you only need the size and pounds per foot. 64

66 USED DRILL PIPE Double White Band RealWare 6 Yr. Life Values are (M) Market/ Per Ft. Do Not Apply Depreciation SIZE/WGHT/GRADE MARKET 2 ⅜ X 6.65# E $ ⅜ X 6.85# E $ ⅞ X 10.40# E $ ½ X 9.50# E $ ½ X 13.30# E $ ½ X 15.50# E $ X 14.00# E $ X 15.70# E $ ½ X 16.60# E $ ½ X 20.00# E $ ½ X 22.82# E $ X 19.50# E $ X 25.60# E $ X 34.01# E $ ½ X 21.90# E $ ½ X 24.70# E $ ⅝ X # E $ ⅝ X 27.70# E $22.50 Notes: Premium is the same as Double White. Must have inspection papers and must not have been used since inspected. The Premium Used or Double White drill pipe prices includes grade E only. Other grades you may see are normally downgraded to grade E. For easy use in the field you only need the size and pounds per foot. 65

67 YELLOW BAND OR UN-INSPECTED USED PIPE RealWare 6 Yr. Life Values are (M) Market / Per Ft. Do Not Apply Depreciation SIZE/WIGHT/GRADE MARKET 2 ⅜ X 6.65# / 6.85# $ ⅞ X 10.40# $ ½ X 9.50 # $ ½ X 13.30# $ ½ X # $ X 14.00# $ X 15.70# $ ½ X 16.60# $ ½ X 20.00# $ ½ X 22.82# $ X 19.50# $ X 25.60# $ X 34.01# $ ½ X 21.90# $ ½ X 24.70# $ ⅝ X 25.20# $ ⅝ X 27.70# $11.50 Notes: Yellow Band or Un-Inspected drill pipe has limited use and may or may not have inspection papers, usually used with drilling shallow, low pressure gas wells, and can be used but has limitations based on individual wells. Yellow Band is commonly downgraded to grade E. For easy use in the field you only need the size and pound per foot. 66

68 USED DRILL PIPE - STRUCTURAL RealWare 6 Yr. Life Values are (M) Market / Per Ft. Do Not Apply Depreciation SIZE MARKET 2 ⅜ $ ⅞ $ ½ $ $ ½ $ $ ½ $ ⅝ $2.50 Notes: Structural quality drill pipe is usually the rejected pipe from inspected pipe and is no longer safe for use in drilling operations. There are many other uses for Structural quality pipe. To value structural quality pipe all you need is the size, or majority of sized when mixed. Usually the grades and weights are mixed and prices are based on size and footage. Quantities are usually over 1,000 ft. Quantities less than 1,000 ft. should be considered as scrap because there is limited demand for small quantities. USED DRILL PIPE -SCRAP RealWare 6 Yr. Life Values are (M) Market / Per Ft. Do Not Apply Depreciation SIZE MARKET 2 ⅜ $ ⅞ $ ½ $ $ ½ $ $ ½ $ ⅝ $0.65 Notes: Scrap Quality drill pipe is pipe that is not suitable for use as structural, or small quantities of structural quality pipe. Usually bought and sold by the pound. The above table is a typical conversion for estimating scrap value using footage. 67

69 A 1.9 DRILL COLLARS Drill collars may consist of New, Spiral, Slick, Premium, Good Used Un-inspected or Scrap with rigs in the field or in yards. Drill collars are typically new premium (inspected), good-used (un-inspected) or scrap. There is usually no other grouping such as fair even though they may need facing or running (repair), they are considered as good used in most instances because they are usually kicked out by inspection otherwise. Drill collars that are classified as spiral but show wear to the point that there are voids in the spirals, or the spiral is barely visible, should be downgraded to slick. Notes: Drill Collar value must be added to Rig Values. 68

70 NEW DRILL COLLARS RealWare 6 Yr. Life Values are (RCN) Values Per 31 /Joint O.D. SLICK SPIRAL 3 ⅛ $592 $650 3 ¼ $668 $750 3 ½ $1,185 $1,300 4 ⅛ $1,262 $1,400 4 ¾ $1,595 $1,800 4 ⅞ $2,059 $2,300 5 $2,470 $2,700 6 $3,345 $3,700 6 ¼ $3,705 $4,100 6 ½ $3,809 $4,200 6 ¾ $3,859 $4,200 7 $4,219 $4,600 7 ¼ $4,477 $4,900 7 ¾ $4,736 $5,200 8 $6,948 $7,600 8 ¼ $7,102 $7,800 8 ½ $7,206 $7,900 9 $7,720 $8,500 9 ½ $8,182 $9, $8,389 $9, $9,624 $10,600 O. D. = OUTSIDE DIAMETER 69

71 USED PREMIUM (Inspected) DRILL COLLARS RealWare 6 Yr. Life Values are (M) Market / Per Ft. Do Not Apply Depreciation Values Per 31 / Joint SIZE SLICK SPIRAL 3 / 3 ¼ $145 $160 3 ½ / 3 ¾ $285 $320 4 / 4 ¼ $345 $380 4 ½ / 4 ¾ $530 $590 5 / 5¼ $695 $770 5 ½ / 5 ¾ $775 $850 6 / 6 ¼ $985 $1,080 6 ½ / 6 ¾ $1,235 $1,360 7 / 7 ¼ $1,605 $1,770 7 ½ / 7 ¾ $1,950 $2,150 8 / 8 ¼ $2,821 $3,110 8 ½ / 8 ¾ $2,970 $3,270 9 / 9 ¼ $3,150 $3,470 9 ½ / 9 ¾ $3,830 $4, / 10 ¼ $4,370 $4, ½ / 10 ¾ $5,240 $5, $5,745 $6,320 Notes: Collars may be turned down from one size to the next smaller size after wear and use reducing O.D. to the smaller size. Prices reflect the market with inspection papers and unused since the last inspection. If joints small then are listed the value should be adjusted based on the actual length as a percentage to the full length pricing. Example: 6 (Slick Collar), 25 Joint 25 / 31 = x $985 = $798 Est. Value 70

72 USED GOOD BUT (Un-Inspected) DRILL COLLARS RealWare 6 Yr. Life Values are (M) Market / Per Ft. Do Not Apply Depreciation Values Per 31 / Joint SIZE MARKET 3 / 3 ¼ $150 3 ½ / 3 ¾ $340 4 / 4 ¼ $370 4 ½ / 4 ¾ $530 5 / 5 ¼ $700 5 ½ / 5 ¾ $730 6 / 6 ¼ $990 6 ½ / 6 ¾ $1,270 7 / 7 ¼ $2,090 7 ½ / 7 ¾ $2,120 8 / 8 ¼ $2,750 8 ½ / 8 ¾ $2,860 9 / 9 ¼ $3,080 9 ½ / 9 ¾ $3, / 10 ¼ $4, ½ / 10 ¾ $5, $5,500 Notes: If joints are smaller than are listed the value should be adjusted based on the actual length as a percentage to the full length pricing. Example: 6 (Collar), 25 Joint 25 / 31 = x $990 = $802 Est. Value 71

73 SCRAP DRILL COLLARS RealWare 6 Yr. Life Values are (M) Market / Per Ft. Do Not Apply Depreciation Values Per 31 / Joint SIZE MARKET 3 / 3 ¼ $90 3 ½ / 3 ¾ $100 4 / 4 ¼ $125 4 ½ / 4 ¾ $175 5 / 5 ¼ $200 5 ½ / 5 ¾ $265 6 / 6 ¼ $300 6 ½ / 6 ¾ $325 7 / 7 ¼ $350 7 ½ / 7 ¾ $400 8 / 8 ¼ $425 8 ½ / 8 ¾ $475 9 / 9 ¼ $500 9 ½ / 9 ¾ $ / 10 ¼ $ ½ / 10 ¾ $ $675 Notes: Scrap drill collars are usually rejected from inspections and cannot be economically repaired. They are instead used for machine shop stock. Additionally, larger sizes of scrap collars may be turned down to smaller sized collars. If joints are smaller than are listed the value should be adjusted based on the actual length as a percentage to the full length pricing. Example: 6 (Collar), 25 Joint 25 / 31 = x $300 = $243 Est. Value 72

74 APPENDIX 2: OIL & GAS FIELD EQUIPMENT 73

75 A 2.1 NOTE TO ASSESSORS Some of the equipment described in this section may be used for oil, gas, and coal bed methane. The data and values listed in this section are intended to serve as a reference guide. Economic conditions in your area may warrant adjustments to the values in this manual. You may apply adjustments with supporting documentation. Documentation must be maintained for each adjustment made. The following conditions have been developed intending to promote a good understanding of conditions assigned to the items appraised and an effective means of communicating the impact of condition, on value. Care must be taken in assignments of condition ratings to accurately reflect the impact on value. Oil and Gas Field equipment should be listed under abstract code A 2.2 CONDITION OF EQUIPMENT It should be noted that when determining conditions, the appearance of the particular item is important. However the equipment must be judged on mechanical and electrical working conditions and not just on appearance. Paint, lubrication, and general cleanup should be part of general maintenance and should not be used to cover up defective equipment. The appraiser must use experience and firsthand knowledge of the equipment to make accurate judgments for condition ratings. An appraiser must give consideration to several factors in determining condition. The physical condition, deterioration, depreciation or state of repair is a major factor in values. Loss of value due to curable or incurable depreciation is a consideration of market value. These are not the only conditions but represent the majority of determinations when setting value(s). Note: Typically, aged operational oil and gas field equipment is maintained well enough that it should have some remaining economic life left. OSHA requires all oil and gas field equipment to be in satisfactory, normal, safe operating condition or sound mechanical working condition. Condition Codes of Equipment: NW or Ex): New or Excellent; New mechanical condition, extremely low hours of use, no defects and potentially still under warranty. (VG): Very Good; May have been recently overhauled or rebuilt with new or nearly new material and/or has had such limited use that no repairs or parts replacement is necessary. Very low hours of use. (GD): Good; In complete operating condition. No known or obvious mechanical defects but may have some minor worn parts that will need repair or replacement in the near future. May have higher hours and the need for replacement in the near future, but no defects are obvious. (FR): Fair; Has very high hours or extended use. Defects are obvious and will require repair or general rebuild soon. Less than 100% functional or efficient and may be questionable. (PR): Poor; Has a very high number of service hours. Requires rebuild, repair, or overhaul before it can be used. Not operational or functional. (SA OR SC): Salvage or Scrap; Cost of repairs exceed value or cost of replacing with like equipment. Past useful life and should be sold as scrap. 74

76 A 2.3 WELL HEAD EQUIPMENT & (CHRISTMAS TREE) Wellhead w/ Plunger Lift. Well Head On Flowing Well & Christmas Tree Assembly 75

77 The wellhead is the equipment used to maintain surface control of the well. It is usually made of cast or forged steel and machined to a close fit to form a seal and prevent well fluids from blowing or leaking at the surface. The wellhead is made up of many heavy fittings with certain parts designed to hold pressures up to 30,000 PSI. The wellhead is formed by a combination of parts called the casing head, tubing head, Christmas tree, stuffing box, and pressure gauges. The casing head consists of heavy fitting that provides a seal between casing and the surface. The casing head also supports the entire length of casing that will run all the way down the well. This component contains a gripping mechanism that ensures a tight seal between the head and the casing itself. The tubing head is much like the casing head. It provides a seal between the tubing, which is run inside the casing, and the surface. Like the casing head, the tubing head is designed to support the entire length of the casing, as well as provide connections at the surface, which allow the flow of fluids out of the well to be controlled. The 'Christmas tree' is the piece of equipment that fits on top of the casing and tubing heads, and contains tubes and valves that control the flow of hydrocarbons and other fluids out of the well. It commonly contains many branches and is shaped somewhat like a tree, thus its name, Christmas tree. The Christmas tree is the most visible part of a producing well, and allows for the surface monitoring and regulation of the production of hydrocarbons from a producing well. A typical Christmas tree is about six feet tall. Once the well is completed, it may begin to produce oil/natural gas. In some instances, the hydrocarbons that exist in pressurized formations will naturally rise up through the well to the surface. This is most commonly the case with natural gas. Since natural gas is lighter than air, once a path to the surface is opened, the pressurized gas will rise to the surface with little or no interference. This is most common for formations containing natural gas alone, or with only a light condensate. In these scenarios, once the Christmas tree is installed, the natural gas will flow to the surface without assistance. In some oil/natural gas wells that have associated natural gas, it is more difficult to ensure an efficient flow of hydrocarbons up the well. The underground formation may be very 'tight', making the movement of petroleum through the formation and up the well a very slow and inefficient process. In these cases, lifting equipment or well treatment is required. Well heads will be either threaded or flanged. The Christmas tree (Well Head & Valves) components are different for a gas well than for a pumping oil well. Cost is related to pressure; i.e., the higher the pressure encountered, the higher the cost of the well head equipment. Well head equipment listed here is representative of most common types of well head installations in Wyoming. It is designed for surface casing up to 8-⅝", production casing up to 5", and tubing up to 2-⅞". The value will vary as to whether the well head is for a pumping or free flowing wells, whether it is the threaded or flanged type, and according to the pressure rating. Notes: (Coal Bed Methane Well Heads) - See Appendix 3 76

78 RealWare 14 Yr. Life Values are (RCN) TYPE HEAD WORK PRESSURE (PSI) RCN Pumping Threaded 500# $1,400 Pumping Threaded 1000# $2,600 Pumping Flanged 2000# $4,300 Pumping Flanged 3000# $6,000 Pumping Threaded 2000# $3,800 Pumping Threaded 3000# $4,000 Pumping Threaded 5000# $4,200 Gas or Flowing Threaded 2000# $3,200 Gas or Flowing Flanged 2000# $9,800 Gas or Flowing Flanged 3000# $16,200 Gas or Flowing Flanged 5000# $26,600 Gas or Flowing Flanged 10,000# $42,300 Notes: Well Head Equipment includes: Casing Head, Tubing Heads, Gauges, Valves, Fittings, Components, Materials, Equipment, Delivery, Assembly and Installation. If Made In China: Deduct 30% Threaded Wellheads are becoming the most common on shallow gas wells. H²S = Hydrogen Sulfide is a very poisonous gas found in some oil and gas wells and requires special equipment, such as stainless steel alloys. For H²S Treated/Stainless = Add 40% to working pressures under 5000 #. WELLHEAD WHICH ARE NOT TYPICAL Well heads may occasionally be found which do not fit the guidelines and costs listed above. In such cases, the appraiser must obtain the original installed cost of the well head equipment. This includes not only the casing head and tubing head, but also all the valves, gauges, and miscellaneous connections plus the installed costs associated with the well head. A TRAPPERS Well head trappers may be found on some oil well heads that have a surface pumping unit. This is a device mounted on the top of the Christmas tree that is designed to contain any spills from where the sucker rod goes into the tree. Trappers are not included in the cost of the well head equipment and should be priced accordingly. RealWare 14 Yr. Life Installation Included Double Pack 3 to 7 Lids $600 Double Pack 8 to 11 Lids $750 Double Pack 12 to 14-1/2 Lids $950 77

79 A 2.4 SURFACE PUMPING UNITS (PUMPJACK, BEAM PUMP, ETC.) A surface pumping unit is a machine used to impart and up-and-down motion, generally through a sucker rod string. The most popular unit is a Beam Pumping Unit. A prime mover furnishes the power to run a beam pumping unit, and is powered by either an electric motor or internal combustion engines. The model of the pumping unit can usually be found on the identification or specification plate. Older pumping units may have model designations different from those listed. In such cases, the appraiser should look for a metal tag on the pump gear housing which lists the gear reducer torque rating. This torque rating, listed in thousands of pounds, should correspond to one of the model designations. For example, a gear reducer torque rating of 114,000 lb. corresponds to a Model 114 pumping unit. (See the following table) Pump Jack Size Correlation: Lb. OF TORQUE ELECTRIC MOTOR HP INTERNAL COMBUSTION 6, ,000 7 ½ ½ - 40, , , , , , , , , ,

80 Notes: Installed pumping unit costs include pumping unit drive accessories, foundation bolts, centerline hold-downs, crank, belt guard, and gas or electric motor. Values do not include a remote terminal if present. Pumps values (stand-alone) that are not installed, should be used to value units that are stored or stacked. RealWare 14 Yr. Life Values are (RCN) High End Units: LUFKIN, AMERICAN & other High Cost Brands SIZE PUMP FUEL ELECTRIC 3, 4, 5 $2,600 N/A $3,300 6,6.4 $4,500 N/A $5, $5,900 $8,100 $7, $7,000 $9,300 $9, $7,900 $9,900 $9, $14,300 $13,600 $13, $15,000 $17,000 $16, $19,700 $23,100 $20, $24,200 $27,800 $26, $30,800 $33,700 $32, $37,700 $43,500 $43, $43,000 $47,000 $46, $53,600 $61,400 $59, $54,600 $62,000 $60, $56,200 $63,400 $62, $70,500 $82,200 $81, $81,800 $90,200 $87,100 Low End Units: JENSEN, CHURCHILL, COOK and similar Low Cost Brands SIZE PUMP FUEL ELECTRIC 3,4,5 $1,900 N/A $2,400 6, 6.5 $3,000 N/A $3, $4,300 $5,700 $5, $5,200 $6,100 $6, $5,900 $7,700 $7, $8,000 $9,700 $9, $10,200 $11,200 $10, $13,500 $15,900 $15, $17,700 $20,000 $19, $21,000 $24,700 $24, $26,200 $32,000 $31, $32,400 $39,100 $38, $41,100 $42,000 $41, $44,100 $51,300 $50, $54,200 $52,900 $52,500 Conditions: Rebuild / Very Good = 80% (RCN); Good = 50% (RCN); Fair = 25% (RCN), Scrap = 5% (RCN) 79

81 A 2.5 PNEUMATIC SURFACE PUMPING UNITS Pneumatic is simply defined as air operated. A pneumatic surface pump, also referred to as a pneumatic sucker rod pump is a reciprocal pumping unit in which one or more cylinders are placed over the wellhead and a counterbalance system using compressed air or gas is provided. If sufficient well head or lease gas is available, the unit is usually powered by such gas. The system consists of the pumping unit and a gas reservoir tank. When sufficient natural gas is not available, an auxiliary compressor is used to provide the pneumatic pressure required. Such a system consists of the pumping unit, one or more compressors and two or more reservoir tanks. Notes: To determine the total RCN of a pneumatic pumping system, add the RCN of the pumping unit, and the RCN of the appropriate tanks. RealWare 14 Yr. Life Values are (RCN) per Ft. Cyl Stroke Cyl bore RCN 3 8 / 11½ $2, / 11½ $4, / 11½ $7, / 11½ $7, $9, ½ $10, ½ $11,500 INSTALLED TANKS Operating PSI CUBIC FT CAP RCN $1, $2, $3, $3,600 80

82 A 2.6 SUCKER RODS Sucker rods are steel rods that are used to connect the surface pumping equipment and the downhole components of a reciprocating piston (rod) pump installed on an oil well. Sucker rods are typically in length and threaded at each end to enable the downhole component to be run and retrieved easily. Note: Please refer to Chapter 2.4 for clarification on exempt status of underground equipment. Notes: RealWare 14 Yr. Life Values are (RCN) per Ft. SIZE RCN PER FOOT 3/8 $1.90 ½ $2.00 ⅝ $2.20 ¾ $2.30 ⅞ $ $ ⅞ $5.30 If used sucker rods are identified in good condition, value should be estimated at 70% of RCN. A 2.7 SURFACE INJECTION PUMPS W/ PISTON & PLUNGER Surface Injection Pump is an injector pump used to inject chemical or ingredient into a flow line system to treat emulsions at a rate proportional to that of the flow of the well liquids. Operating power is usually an electric motor but may be from a linkage on a pump jack / walking beam of an active well. In very rare cases the pump may be operated by a small natural gas powered engine / powered by the well. Every injection surface pump has a power source, and the table below includes electric motors. 81

83 RealWare 14 Yr. Life Values are (RCN) MAX GPM FLOW RCN REBUILT VERY GOOD FAIR GOOD Up to 10 $7,900 $6,400 $5,000 $3,000 Over 10 up to 25 $9,300 $7,700 $6,000 $3,700 Over 25 up to 30 $10,000 $8,100 $6,700 $4,000 Over 30 up to 50 $11,000 $8,600 $7,000 $4,400 Over 50 up to 75 $12,400 $10,000 $8,000 $5,000 Over 75 up to 100 $13,300 $10,600 $8,600 $5,300 Over 100 up to 150 $15,000 $12,000 $9,700 $5,700 Over 150 up to 200 $16,000 $12,600 $10,400 $6,400 Over 200 up to 300 $16,600 $14,000 $12,400 $6,700 Over 300 $28,600 $21,900 $17,700 $10,600 Notes: Estimated value can be adjusted based on condition, however, it is suggested that you consider using the RCN and depreciate. Salvage Value = 10% (RCN) A 2.8 SURFACE PUMPING - UNIT CONTROLERS RealWare 14 Yr. Life Values are (RCN) SIZE HP RCN 1 10 $ $ $1, $1, $3,300 Price includes starter, Disconnect, Controls & Box A 2.9 SUBMERSIBLE WELLHEAD PUMPS (ESP) Note: Please refer to Chapter 2.4 for clarification on exempt status of underground equipment. A submersible well head pump, or subsurface electrical pump is an artificial-lift system that is directly connected to an electric motor (often referred to as variable speed drive) that utilizes a downhole pumping system. ESP systems consist of both surface components and sub-surface components found in the 82

84 wellbore. Surface components include motor controls (VSD), surface cables, transformers, J-Box, & switchboards. Sub-surface components consist of pump, motor, seals and cable. The pump is typically comprised of a multiple stage centrifugal pump sections that can be specifically configured to suit the production wellbore characteristics of a given application. The unit is sized so that it may be lowered into the well to the desired depth with an insulated cable extending from the surface through which electricity is supplied to the motor. Operation is controlled by a control box at the surface. Electrical submersible pump systems are a common artificial-lift method, providing flexibility over a range of sizes and output flow capacities. Sizes listed below refer to casing / pump size. Estimated costs include both pump and motor. RealWare 14 Yr. Life Values are (RCN) SIZE RCN 4½ & 5 $2,000 5½ & 5 ¾ $2,400 6 & 6 ⅝ $2,900 7 & 7 ⅝ $3,300 8 & 8 ⅝ $3,600 9 & 9 ⅝ $4, & 10 ¾ $4, ¾ $4, & 13 ⅜ $5,500 83

85 A 2.10 VARIABLE SPEED DRIVES FOR SUBMERSIBLE PUMPS (VSD) Variable Speed Drives allow an operator to optimize performance of the submersible pump system by varying the production rate of the well. Variable Speed Drives (VSD) can be tailored to the unique requirements of electrical submersible pumps and surface pumping systems. They are designed to provide reliable power, protection, and control and are highly adaptable and allow operating parameter adjustments. RealWare 14 Yr. Life Values are (RCN) DRIVE SIZE RCN AUTO TRANSFORMER SIZES RCN 66 AMP (60) $20, KVA (100) $10, AMP (80) $24, KVA (125) $12, AMP (100) $25, KVA (150) $13, AMP (125) $28, KVA (200) $15, AMP (160) $32, KVA (250) $17, AMP (200) $37, KVA (350) $20, AMP (250) $39, KVA (400) $22, AMP (325) $47, KVA (500) $24, AMP (350) $48, AMP (450) $59, AMP (500) $64,100 * KVA = (kilovolt-ampere). Approximately 89/100 kw. Numbers listed in ( ) are the designated name plate numbers on the actual equipment in the field.* Notes: (VSD) must include the following: Drive Unit + Auto Trans + Disconnect + J-Box = Total Cost 84

86 A 2.11 TRANSFORMERS 5 KVA, Single Phase Transformer 300 KVA 3-Phase Transformer 2000 KVA Transformer Transformers are used to convert electrical power in an alternating-current system from one voltage and current to some other voltage and current, or a device for increasing or decreasing the voltage in an alternating-current circuit. 85

87 RealWare 22 Yr. Life Values Indicated are Replacement Cost New (RCN) KVA DRY WET SINGLE PHASE THREE PHASE 3 $500 5 $ $ $ $1, $1, $1, $2, $2, $3, $3, $3, $3,780 $11, $18, $21, $26,360 1,000 $31,490 1,500 $39,540 2,000 $42,040 2,500 $46,310 3,000 $51,300 FACT TRANSFORMERS RealWare 22 Yr. Life Values Indicated are Replacement Cost New (RCN) KVA RCN 25 $2, $3, $3, $4, $4, $4,900 86

88 A 2.12 J-BOX The Junction Box (J-Box) is used to prevent the migration of gas to the switchboard or variable drive where the gas could be ignited by the sparks generated by an electrical breaker or circuit and cause an explosion. Typical installation of the J-Box may be 15 feet or more from the wellhead, and 35 feet of more from the switchboard. Notes: RealWare 14 Yr. Life Values are (RCN) VOLTS RCN 600 $ $1,200 2,500 $1,800 3,600 $2,600 The size of the control panels determines the J-Box requirements. 87

89 A 2.13 CONTROL PANELS SWITCHBOARDS FOR SUBMERSIBLE PUMPS Switchboards are a control panel working on the surface when the pump is equipped with a working motor control. Switchboards transfer the input voltage and frequency to the output and in turn to the motor which enables the system to run at a fixed frequency that is the same as that of the supply power. In addition to the transfer of power, the switchboard provides control in terms of on and off switches and protection and metering devices to set alarms, safe operating parameters, and records important parameters like current, phase voltage, and voltage imbalances. The main functions of the switchboard are: A) control the possibility of downhole problems such as current overload or under load; B) auto restart after intermittent under load conditions; C) detect voltage unbalance. Notes: RealWare 14 Yr. Life Values are (RCN) VOLTS PANEL W/MOTOR CONTROL 600 $2,000 NOT REQUIRED 1,500 $7,700 $9,300 2,500 $9,100 $10,600 3,600 $12,300 $13,300 Cost estimates do not include motors costs, or installation. A 2.14 DISCONNECT SWITCHES RealWare 14 Yr. Life Values are (RCN) AMP VOLTS RCN $ $ $ $1, $1, $1, $2, $3,000 88

90 A 2.15 GAS PUMING UNITS / ENGINES (MOTORS) RealWare 14 Yr. Life Values Indicated are Replacement Cost New (RCN) INSTALLATION COST NOT INCLUDED HP RCN 2 $500 4 $500 5 $800 6 $ $900 8 $1, $1, $2, $2, $2, $2, $3, $3, $3, $3, $4, $5, $5, $6, $7, $7, $9, $12, $15, $18, $20, $22, $24, $27, $29, $32, $33, T $70, T $93, T $116,700 *T Turbo Charged Engine CONDITIONS: VG=.70 of RCN, G=.50 of RCN, F=.30 of RCN, P=.10 of RCN 89

91 A 2.16 WATER PUMPS Pumps have various uses in the oil field. They are used to pump water to various locations such as to a well, from a well, to a tank, tank to tank, etc. Values include basic power, typically a drip proof motor found with pumps. Notes: Values are for the pump and basic power only. Values do not include gauges, valves, or pipe. Values do not include installation costs. RealWare 14 Yr. Life Values Indicated are Replacement Cost New (RCN) SUCTION DISCHARGE HORSEPOWER 1750 RPM RCN 2 1 ½ 3 $1,600 5 $1,700 7 ½ $1,900 2 ½ 2 5 $1,900 7 ½ $2, ½ 5 $1,900 7 ½ $2, $2, $1, $2, $3, $3, $2, $2, $3, $3, $3, $4, $4, $5, $6, $6, $8, $4, $5, $6, $8, $5, $7, $10, $10, $13,000 FIELD DESCRIPTION = SUCTION X DISCHARGE X HORSEPOWER EXAMPLE 8 X 6 X 40 = $5,700 90

92 A 2.17 ENGINES (GAS - DIESEL) RealWare 14 Yr. Life Values Indicated are Replacement Cost New (RCN) GAS OR DIESEL LOW SPEED HP RCN 10 $4, $6, $9, $12, $14, $18,600 NATURAL GAS LOW SPEED HP RCN 10 $3, $3, $4, $4, $5, $8, $9, $10, $17, $20,300 LARGE STATIONARY DIESEL HP RCN 145 $18, $25, $42, $48, $63, $86,200 1,200 $127,600 1,600 $170,200 *INSTALLATION NOT INCLUDED* 91

93 A 2.18 MOTORS, ELECTRIC INDUSTRIAL RealWare 14 Yr. Life Values Indicated are Replacement Cost New (RCN) EXPLOSION PROOF / TEFC / INSTALLATION NOT INCLUDED Notes: HP RCN ½ $400 1 $500 2 $500 5 $ $ $1, $1, $1, $2, $2, $3, $3, $4, $6, $8, $11, $12, $15, $16, $17, $22, $23,500 The above table is for 1,800 RPM (Most Common). TEFC Totally Enclosed and Fan Cooled 1,200 RPM Use Next Larger Size 900 RPM Use Next Two Larger Sizes 720 RPM Use Next Three Larger Sizes 3,600 RPM (Under 75 HP) Use Next Smaller Size 3,600 RPM (Over 75HP) Use Next Larger Size Example: 100 1,200 RPM = $11,300 Conditions: Very Good =.70 OF RCN Good =.50 OF RCN Fair =.30 OF RCN Poor =.10 OF RCN 92

94 A 2.19 GENERATOR SETS RealWare 14 Yr. Life Values Indicated are Replacement Cost New (RCN) KW RCN 10 $7, $8, $10, $12, $14, $16, $18, $23, $25, $29, $35, $39, $56, $56, $65, $73, $81, $85, $87, $92, $111, $119, $129, $139, $147, $161,600 1,000 $176,900 1,240 $179,600 1,460 $196,800 Standby, Skid Mounted, Not Permanent Includes Control, Automatic Emergency Shutdown. 93

95 A 2.20 PRODUCTION SEPERATORS 94

96 Well fluids are often a complex mixture of liquid hydrocarbons, gas, and some impurities. It is necessary to remove the gas and impurities from the liquid hydrocarbons before they are stored, transported, and sold. Liquid hydrocarbons and impurities must also be removed from natural gas before the gas goes to a sale. Some of the impurities that might be found are hydrocarbons, hydrogen sulfide, carbon dioxide, free water, water vapor, nitrogen, helium, and solids. Separation of well-stream gas from free liquids is the most common and simplest form of field processing. The equipment most widely used for this type of processing is referred to as a separator. The size of the separator is dependent upon rate of flow of the natural gas and/or liquids going into the vessel. The operating pressure of the vessel is dependent upon the pressure of the gas sales lines, the flowing pressure of the well, and the operating pressure desired by the operator. Separators are built in various designs such as vertical, horizontal, and spherical. The internals of the vessel, to aid in the mechanical separation of the gas and liquids, are of special design, depending upon the manufacturer. Most separators are two-phase, separating gas and liquids, although they can also be three-phase, separating natural gas, liquid hydrocarbons, and free water. Vertical separators are most widely used when the major production of the well is oil. Horizontal separators are most widely used when the major production of the well is natural gas. Separators do not have burners. RealWare 14 Yr. Life Values are (RCN) VERTICAL PRODUCTION SEPARATORS (MOSTLY OIL/WATER) SIZE PSI RCN 16 X $3, X $3, X $4, X $4, X $5, X $5, X $6, X $6, X $7, X $6, X $7, X $8, X 10 1,000 $9, X $8, X $9, X $9, X 10 1,000 $11, X $8, X $9, X $10, X 10 1,000 $11,200 Notes: Costs include all necessary controls, gauges, values and piping. 95

97 RealWare 14 Yr. Life Values are (RCN) HORIZONTAL PRODUCTION SEPARATORS (MOSTLY GAS/WATER) SIZE PSI RCN 13 X $2, X $3, X $4, X 5 1,000 $5, X $4, X $4, X $5, X 7.5 1,000 $6, X $7, X $6, X $7, X 10 1,000 $8, X $7, X $8, X $8, X 10 1,000 $9, X $5, X $6, X $6, X 5 1,000 $7, X $6, X $7, X $8, X 10 1,000 $9, X $8, X $9, X $10, X 10 1,000 $11, X $9, X $10, X $11, X 10 1,000 $12,000 Notes: Costs include all necessary controls, gauges, values and piping. 96

98 A 2.21 SCRUBBER A scrubber is a device designed to remove dirt, water, foreign matter, or undesired liquids that are part of the gas stream. Air can be used to absorb water; or an oil bath might be used to remove dust, dirt or other liquids. A scrubber is used to protect downstream equipment or to recover valuable liquids from gas. Gas scrubbers are basically two-phase separators specifically designed to handle gas streams having high gas to liquids ratios, varying flows and liquids surging. Notes: RealWare 14 Yr. Life Values are (RCN) SIZE TYPE PSI RCN 8 X 8 HORIZONTAL 1,000 $1, x 10 HORIZONTAL 1,000 $2, x 8 HORIZONTAL 1,000 $2,600 A scrubber is a cylindrical high pressure vessel that is installed at some point in the flow lines. Installed costs include necessary controls, gauges, values, etc. Additional Sizes: 8 x $250 x Length = $ 10 x $290 x Length = $ 12 x $300 x Length = $ 97

99 A 2.22 HEATER / TREATER 98

100 A Heater Treater is used in the oil and gas production process and is used to remove water and gas from the produced oil and to improve its quality for sale into crude oil pipelines or other transport. A heater treater combines the following components inside the heater treater: a heater, free-water knockout, and an oil and gas separator. RealWare 14 Yr. Life Values are (RCN) VERTICAL HEATER / TREATER FIRE BOX SIZE PSI RCN 36 X $10, X $11, X $10, X $11, X $12, X $12, X $13, X $15, X $15, X $16, X $17, X $19, X $16, X $14, X $16, X $28, X $30,500 HORZONTAL TREATERS & HEATER TREATERS FIRE BOX SIZE PSI RCN 48 X $12, X $13, X $15, X $19, X $21, X $23, X $24, X $25, X $26, X $19, X $36, X $39, X $39,900 99

101 Notes: Treaters The function of a treater is to separate oil, water, and gas emulsions. Generally vertical units treat light and medium density emulsions, while horizontal units treat heavy emulsions. Treaters utilize burners (usually natural gas) and their BTU rating may range from 200,000 to 3,000,000 BTU per hour. Heaters Heater units are sometimes required to facilitate crude oil flow where very cold temperatures prevail, or when the crude oil is very heavy and viscous. Heaters may be either direct in line or indirect. Direct in line heaters are those in which the tubes carrying the product are directly heated by flame from the burner. Indirect heaters are those in which a water solution is heated which in turn heats the tubes carrying the product. RealWare 14 Yr. Life Values are (RCN) HEATER REPLACEMENT COST SIZE BTUH DIRECT INDIRECT 18 X 5 90,000 $5,600 $7, X 5 100,000 $6,100 $7, X 3 75,000 $4,800 $6, X 5 160,000 $6,000 $7, X 5 250,000 $6,100 $7, X 6 250,000 $6,100 $7, X ,000 $6,100 $8, X ,000 $6,400 $8, X 6 250,000 $6,100 $8, X ,000 $6,400 $8, X ,000 $6,400 $8, X ,000 $7,800 $11, X ,000 $7,800 $11, X 12 1,000,000 $10,600 $16, X 15 1,000,000 $10,600 $16, X ,000 $8,600 $11, X 10 1,000,000 $10,800 $16, X 12 1,500,000 $19,000 $24, X 14 1,500,000 $19,000 $24, X 14 2,000,000 $22,300 $31, X 18 2,000,000 $22,300 $31, X 20 1,500,000 $20,300 $24, X 20 2,000,000 $22,600 $30, X 12 1,500,000 $23,800 $25, X ,000,000 $24,400 $31, X 18 3,000,000 $38,700 $47, X 20 3,000,000 $38,700 $47, X 22 4,000,000 $53,300 $63,800 *Includes installation, all necessary controls, gauges, valves, piping, and fuel lines. 100

102 A 2.23 FREE WATER KNOCKOUT Many oil wells may produce large volumes of water in addition to crude oil. The volume of free water may exceed the capacity of the treating system necessitating the installation of a free water knockout. The function of a free water knockout is to automatically remove the free water ahead of the treating system, and sends only the emulsion on to be heated and treated. The vessel can be either horizontal or vertical in design. The size is dependent upon the desired retention time and the volume of water per day to be handled. Notes: PSI = Pounds or pressure per square inch WP = Working pressure BBLS / Day = Barrels per day RealWare 14 Yr. Life Values are (RCN) DIA X HGHT PSI WP BBLS / DAY RCN 3 X ,500 $3,800 3 X ,800 $5,100 4 X ,500 $4,800 4 X ,000 $7,000 4 x ,000 $8,300 4 X ,000 $10,000 6 X ,000 $11,100 6 X ,100 $11,100 6 X ,000 $13,200 8 X ,500 $11,700 8 X ,000 $13,200 8 X ,000 $16, X ,000 $12, X ,000 $18, X ,000 $19, X ,000 $21,

103 A 2.24 DEHYDRATORS (NATURAL GAS) Natural gas dehydrators, also known as dryers, are devices used to remove water and water vapor from gas. Gas dehydration can be accomplished through a glycol dehydrator. There are two types, one which uses glycol, and the other which uses chloride as a drying agent. Dehydrators will vary in cost according to the volume of gas handled per day. If the volume per day can be determined from the identification of specification plate, or from the owner, the RCN of the dehydrator can be computed by its daily capacity according the following schedule. Gas dehydrators are designed to handle only water and gas vapors. If liquid water or oil enters the dehydrator the device cannot work properly. In instances where liquids are present a combination separator dehydrator may be found. The function of the separator is to remove water droplets from the gas, which can then flow into the dehydrator portion for the removal of water vapor. RealWare 14 Yr. Life Values are (RCN) MILLION CU FT PER DAY RCN Up to 1.8 $8, up to 3.0 $9, up to 4.8 $15, up to 6.1 $20, up to 8.8 $25, up to 10.0 $33, up to 14.7 $40, up to 18.4 $58, up to 24.3 $77, up to 27.1 $90, up to 30.6 $113, up to 34.0 $121, up to 40.5 $129, up to 45.3 $149, up to 51.4 $173, up to 62.3 $184, up to 69.6 $215,000 Combination Separator - Dehydrators MILLION CU FT PER DAY RCN 2.0 $30, $45, $57, $66, $67,

104 A 2.25 GAS PRODUCTION UNITS Multiple (Enclosed) Gas Production Units on a single well-pad with multiple wells. (Open) Skid Mounted Production Unit 103

105 Wellhead production units were developed in response to producers request for a completely integrated system combining all the function of a heater-treater and a high and low separator. Production units are used primarily on natural gas wells to remove liquids from gas prior to further processing or delivery to pipelines. The unit may be either enclosed or open. Notes: Estimated costs listed below are based on the size of the upper cylinder or vessel, which is a high pressure separator. The lower vessel is a heater, and its size is not a factor in determining the property RCN. If a size is encountered which is not listed here, use the RCN for the nearest listed size and BTUH rating. RealWare 14 Yr. Life Values are (RCN) DIA LGTH BTUH RCN ,000 $16, ,000 $23, ,000 $13, ,000 $18, ,000 $18, ,000 $23, ,000,000 $27, ,000 $11, ,000 $18, ,000 $29, ,000 $19, ,000 $19, ,000 $19, ,000 $19, ,000 $23, ,000 $23, ,000,000 $28,200 Includes Installation 104

106 A 2.26 WELDED STEEL TANKS RealWare 14 Yr. Life Values are Market Value Based on Condition Do Not Apply Depreciation CAP BBLS DIA HGT RCN V.GOOD GOOD FAIR $5,000 $4,100 $2,900 $1, $5,300 $4,300 $3,000 $1, $6,200 $4,900 $3,400 $1, $7,300 $5,900 $4,100 $1, $7,800 $6,200 $4,400 $1, $9,100 $7,300 $5,000 $2, $9, 100 $7,300 $5,000 $2, $10,900 $8,600 $6,000 $2, $13,100 $10,700 $7,500 $3, LO $17,100 $14,200 $9,900 $4, HI $17,100 $14,200 $9,900 $4, $27,000 $21,600 $15,000 $6, $34,100 $27,500 $19,300 $8, $45,600 $37,300 $25,500 $11, $49,200 $39,300 $31,400 $14,200 4, $62,600 $50,100 $40,100 $18,100 5, $70,700 $56,600 $45,200 $20,400 Tanks are valued per capacity / BBL, regardless of the height and diameter configuration. 105

107 Notes: Fair Condition Tanks have been damaged but can be removed and economically repaired. Salvage Value = ($0.00) Cost of removal exceeds the value of scrap metal. Stairways - Add $90.00/ Ft. of height to determine the RCN. Depreciate the stairway RCN using a multiplier of.75 for Very Good and.50 for Good. Fair Condition, needing repair, and being unsafe, may need a functional or economical obsolescence adjustment. Catwalks - Add $75.00/ Linear Ft. to determine the RCN. Depreciate the catwalk RCN using a multiplier of.75 for Very Good and.50 for Good. Fair Condition, needing repair, and being unsafe, may need a functional or economical obsolescence adjustment. Tank Containment / Berm Add $55.00 per Linear Ft. for unlined containment and $95.00 per Linear Ft. for lined containment. EXAMPLE: RCN of (2) 300 Barrel Welded Tanks, (1) Stairway, (30 ln/ft) of Catwalk and (250 ln/ft.) lined containment. DESCRIPTION RCN Barrel Welded $8,600 V. Good $17, Stairway for 15 Ht. $67.50 V. Good $ Lin. Ft. Steel $56.25 V. Good $ Lin Ft Lined $95.00 $23, Total Installed RCN $

108 A 2.27 BOLTED STEEL TANKS RealWare 14 Yr. Life Values are Market Value Based on Condition Do Not Apply Depreciation CAP BBLS DIA HGT RCN V. GOOD GOOD FAIR $3,600 $2,200 $1, 100 $ $5,800 $3,500 $1,800 $ $6,200 $3,700 $1,900 $1, $7,900 $4,800 $2,500 $1, $9,900 $6,000 $3,100 $1, $12,400 $7,400 $3,900 $1, LO $18,200 $11,000 $5,700 $2, HI $18,200 $11,000 $5,700 $2, $23,000 $13,900 $7,200 $3,600 1,000 LO $25,800 $16,100 $8,400 $4,200 1,000 HI $25,800 $16,100 $8,400 $4,200 1, $38,700 $23,300 $12,100 $6, $39,800 $23,900 $12,400 $6,200 3, $50,400 $31,600 $16,400 $8,200 3, $59,300 $35,500 $18,400 $9,200 4, ' $66,800 $40, 100 $20,800 $10,500 5, $71,400 $42,900 $22,300 $11,100 Tanks are valued per capacity / BBL, regardless of the height and diameter configuration. 107

109 Notes: Bolted tanks are judged for their functional use and generally suffer from higher front end cost and faster depreciation due to functional obsolescence. Fair Condition Tanks have been damaged but can be removed and economically repaired. Salvage Value = ($0.00) Cost of removal exceeds the value of scrap metal. Stairways - Add $90.00/ Ft. of height to determine the RCN. Depreciate the stairway RCN using a multiplier of.75 for Very Good and.50 for Good. Fair Condition, needing repair, and being unsafe, may need a functional or economical obsolescence adjustment. Catwalks - Add $75.00/ Linear Ft. to determine the RCN. Depreciate the catwalk RCN using a multiplier of.75 for Very Good and.50 for Good. Fair Condition, needing repair, and being unsafe, may need a functional or economical obsolescence adjustment. Tank Containment / Berm Add $55.00 per Linear Ft. for unlined containment and $95.00 per Linear Ft. for lined containment. EXAMPLE: RCN of (2) 300 Barrel Welded Tanks, (1) Stairway, (30 ln/ft) of Catwalk and 250 ln ft of lined containment. DESCRIPTION RCN Bolted Steel $7,400 V. Good $14, Stairway for 25 Ht. $67.50 V. Good $1, Lin. Ft. Steel $56.25 V. Good $1, Lin Ft Lined $95.00 $23, Total Installed RCN $41,

110 A 2.28 FIBERGLASS TANKS RealWare 14 Yr. Life Values are Market Value Based On Condition Do Not Apply Depreciation CAP DIA HGT RCN V.GOOD GOOD FAIR TYPE BBLS $1,900 $1,500 $1000 $400 COVERED $3,200 $2,600 $1,800 $800 COVERED $3,500 $3,000 $2,000 $1,000 OPEN $4,000 $3,400 $2,200 $1,100 COVERED $5,500 $4,700 $3,200 $1,500 COVERED $7,300 $6,200 $4,200 $2,100 COVERED $8,800 $7,500 $5,100 $2,300 COVERED Notes: Tanks are valued at capacity in BBLS, regardless of the height and diameter configuration. Fair Condition Tanks have been damaged but can be removed and economically repaired. Salvage Value = ($0.00) Cost of removal exceeds the value of scrap material. Fiber Glass Tanks are judged for their functional use. They usually have lower front end cost and experience a lower rate of depreciation. They are mostly found in temporary use situations. 109

111 A 2.29 FRAC TANKS Skidded Frac tanks are one of the most common well-site storage units for water or other liquids. These tanks are used for a variety of purposes including drilling, work over, and production phases. They may be used to store frac material, drilling mud, waste collection, early oil production, or a variety of other liquids. Frac tanks are usually rectangular or round and may include exterior insulation or interior coating for use with acids. RealWare 14 Yr. Life Notes: Values are (RCN) BBLS CAP HORIZONTAL CLOSED TOP RCN VERTICAL 100 HORIZONTAL CLOSED $7,500 *119 HORIZONTAL CLOSED $7, HORIZONTAL CLOSED $8, HORIZONTAL CLOSED $8, HORIZONTAL CLOSED $8, HORIZONTAL CLOSED $9, HORIZONTAL CLOSED $9, HORIZONTAL CLOSED $10,100 *210 HORIZONTAL CLOSED $13, HORIZONTAL CLOSED $13, HORIZONTAL CLOSED $16,200 *400 HORIZONTAL CLOSED $22,000 *500 HORIZONTAL CLOSED $25, HORIZONTAL CLOSED/STAINLESS $59,400 * = MOST COMMON SIZE(S) Stainless Steel Tanks Under 500 BBL Multiply RCN by 2.5X Open Top Frac Tanks Multiply RCN by.75x 110

112 A 2.30 GUN BARREL & FLOW TANKS A gun barrel is a settling tank used for treating oil. Oil and brine are separated by gravity segregation forces. The clean oil floats to the top and brine is removed from the bottom of the tank. Notes: RealWare 14 Yr. Life Values are (RCN) CAP / BBLS DIA HGT TYPE RCN WELDED $7, WELDED $9, WELDED $12, WELDED $14,900 Tanks are valued at capacity in BBLS, regardless of the height and diameter configuration. Tanks may be portable, not permanently mounted. Portable tanks can be easily moved between locations as required. 111

113 A 2.31 TANK HEATERS or TANK BURNERS RealWare 14 Yr. Life Size RCN 2 5 $3, $5, $7,000 Installation Included 112

114 A 2.32 METERING EQUIPMENT LACT Metering System Oil Fluid Meter Gas Orifice Meter 113

115 LACT ("Lease Automatic Custody Transfer") meters automatically measures, samples and transfers oil from a lease gathering system into a pipeline. Fluid meters measure the oil, but do not perform all the automatic functions of a LACT meter. Gas orifice meters measure and record the volume of natural gas sold. A meter run, as listed here, means the necessary piping, valves, and supports required for proper installation of the recording meter. Care must be exercised in determining the ownership of the gas meter, as it is usually owned by the Pipeline Company or Gas Company purchasing the gas, but may occasionally be owned by the well operator. RealWare 14 Yr. Life Values are (RCN) LACT METERING UNITS SIZE RCN 2 $20,300 6 $39, $56,000 FLUID METERS TYPE DIA HEIGHT RCN ONE LEVEL CONTROL $16,800 ONE LEVEL CONTROL $24,500 TWO LEVEL CONTROL $16,100 TWO LEVEL CONTROL $19,300 TWO LEVEL CONTROL $23,500 GAS ORIFICE METERS / METER RUNS / SKIDS TYPE METER RUN SKID RCN 2 RECORDING METER ONLY $3,500 $3,500 3 RECORDING METER ONLY $3,700 $3,700 4 RECORDING METER ONLY $4,900 $4,900 2 METER RUN WITH METER $3,400 $2,800 $6,200 2 METER RUN WITH METER & SKID $3,400 $2,800 $3,500 $9,700 3 METER RUN WITH METER $3,700 $3,200 $6,900 3 METER RUN WITH METER & SKID $3,700 $3,200 $3,500 $10,400 4 METER RUN WITH METER $4,900 $4,200 $9,100 4 METER RUN WITH METER & SKID $4,900 $4,200 $3,900 $13,

116 A 2.33 VALVES RealWare 14 Yr. Life Values Indicated are Replacement Cost New (RCN) SIZE GENERAL SERVICE MEDIUM DUTY HEAVY DUTY 3 $300 $900 $1,700 4 $400 $1,100 $2,200 6 $600 $1,700 $3,500 8 $600 $1,900 $4, $700 $2,100 $5, $800 $2,300 $6, N/A $2,800 $8, N/A $3,200 $8, N/A $3,400 $9, N/A $4,100 $11, N/A $4,400 $12, N/A $4,600 $17, N/A N/A $21,700 GENERAL SERVICE = UNDER 150 PSI / USUALLY IRON BODY MEDIUM DUTY = 150 TO 300 PSI / USUALLY STEEL / FLANGED HEAVY DUTY = OVER 300 PSI STEEL / FLANGED OR THREADED THE SIZE OF VALVE IS DETERMINED BY THE SIZE OF PIPE ATTACHED TO THE VALVE. EXAMPLE: If 6 pipe then valve would be a 6. USED VALVES ARE TYPICALLY DOWNGRADED TO THE NEXT LOWER GRADE, THEN DEPRECIATED BASED ON USEFUL LIFE. EXAMPLE: 10 Medium Duty Downgraded to General Service ($2,200 REDUCED TO $700). FOR STAINLESS STEEL MULTIPLY BY

117 A 2.34 MOTOR VALVES MOTOR VALVES / INSTALLED RealWare 14 Yr. Life Values Indicated are Replacement Cost New (RCN) SIZE MEDIUM DUTY HEAVY DUTY 3 N/A $4,400 4 N/A $8,500 6 $3,200 $12,000 8 $4,800 $16, $6,200 $21, $8,200 $27, $10,600 $28, $13,600 $32, $18,200 $35, $23,300 $39, $26,800 $43, $30,400 $47, N/A $58,400 FOR STAINLESS MULTIPLY BY 2.5x 116

118 A 2.35 NATURAL GAS COMPRESSORS Natural Gas Compressors are used to maintain pressure on pipelines. The Pipeline(s) in this case are not State Assessed pipelines. Some natural gas compressors will have a drier built in to control the amount of moisture in the gas. RealWare 14 Yr. Life Values Indicated are Replacement Cost New (RCN) HP STAGE 1 STAGE 2 STAGE 3 STAGE 4 50 $20,600 $21,900 $24,600 $29, $27,900 $30,600 $34,600 $45, $51,200 $55,200 $59,900 $71, $63,200 $69,200 $100,400 $120, $85,100 $95,100 $107,100 $126, $94,400 $101,700 $110,400 $135, $121,000 $130,300 $141,000 $172, $127,700 $149,600 $178,200 $215, $178,900 $196,800 $216,100 $262, $230,800 $249,400 $271,300 $321, $264,700 $285,000 $308,600 $365, $352,500 $379,700 $407,600 $488, $399,000 $490,100 $518,000 $625,800 1,200 $559,900 $605,200 $645,100 $780,700 1,450 $518,000 $731,500 $786,700 $905,700 1,500 $678,300 $756,100 $814,600 $976,200 1,600 $780,000 $814,000 $837,900 $1,001,100 1,750 $808,000 $881,800 $949,600 $1,139,800 2,000 $927,000 $1,010,800 $1,092,600 $1,302,100 2,500 $1,114,500 $1,210,300 $1,304, 100 $1,562,100 3,000 $1,424,400 $1,492,900 $1,591,300 $1,977,000 3,500 $1,695,800 $1,667,200 $2,958,400 $1,993,700 4,500 $2,102,700 $2,308,200 $2,563,600 $3,062,300 Notes: Installation is included. Buildings and foundations are not included. For each stage over 4 you will need to add 10%. If more than one unit is at the same location, multiply by the number of units. 117

119 A 2.36 PIPELINE PIGGING EQUIPMENT Pipeline Pigs are used for several purposes such as: removing water blockage, sludge build up, ice blocking, line maintenance and obstructions of various types. The usage usually determines the type of pig to be used. Pigging requires additional equipment usually considered as part of a pipeline or gathering system. Additional equipment includes Pig Launchers, Pit Traps, Pig Blockers, Pig Catchers, Pig Monitors and similar equipment usually fabricated into the pipeline. Pigs are usually part of a custom designed system for a specific pipeline or gathering system. Location, terrain, type of product in the pipeline... usually factor into the design. SIZE POLY BULLET RealWare 6 Yr. Life Values Indicated are Replacement Cost New (RCN) CONICAL CONE/BRISTLE CONE SOFT FOAM BRUSH W/WIPERS CONE RUBBER SWAB 3 $100 $0 $100 $100 $100 4 $100 $100 $200 $200 $100 6 $200 $100 $300 $200 $200 8 $300 $100 $400 $400 $ $400 $100 $600 $500 $ $800 $200 $700 $1,000 $ $1,200 $400 $1,400 $1,500 $1, $1,600 $400 $2,100 $2,000 $1, $2,200 $600 $2,900 $2,700 $2, $2,900 $700 $3,600 $3,400 $3,000 SIZE BALL TYPE CUP STEEL SCRAPER TYPE BI- DIRECTION 3 $100 $200 $200 $200 4 $100 $200 $200 $400 6 $100 $300 $300 $600 8 $200 $500 $500 $ $200 $700 $600 $1, $300 $1,100 $1,100 $2, $600 $1,800 $1,600 $3, $800 $2,500 $2,200 $4, $1,100 $3,400 $2,900 $5, $1,400 $4,100 $3,700 $7,400 Notes: Good Used Pigs are usually about half the price of new Pigs. Used pigs can sometimes be refurbished, rebuilt or repaired depending on the damage, Type of (PI) and new cost. (PI) Changes direction in the pipeline, up or down, left or right, often the pig gets damaged at these junctions. 118

120 A 2.37 LOGIC CONTROLLER Logic Controllers are used to gather and transmit data and to control production and measures various parameters including; flow volume, density, pressure (PSI), moisture content and other data as required. Value estimates may include source head, detectors, power supply, signal handling readout equipment and emergency notification alarm, and emergency shutdown. Logic controllers are typically custom built to specification for a specific operator and well. Notes: RealWare 10 Yr. Life Values Indicated are Replacement Cost New (RCN) SIZE RCN RECONDITIONED GOOD USED 6 ¾ $9,500 $8,200 $4,800 7 ¾ $10,600 $8,500 $5,000 8 ¼ $15,400 $12,400 $7,400 9 ½ $19,000 $15,800 $9,800 Because these systems are customized, care should be taken to ensure values reflect the reported cost specified by the taxpayer and that all additional costs of acquisition including installation is included in the value estimate. A 2.38 DIGITAL TIMERS Digital Timers may be used for several production applications. They are typically used to measure volume of flow over a period of time. May be used on oil or gas wells, but are most commonly used on gas wells. Direct digital readings may be used with 24 Hr. 30 Day recorder for accumulated flow over time. RealWare 10 Yr. Life Values Indicated are Replacement Cost New (RCN) SIZE RCN RECONDITIONED GOOD USED 2 $3,700 $3,000 $2,500 3 $4,800 $3,800 $3,000 4 $5,300 $4,200 $3,400 6 $5,700 $4,700 $3,700 8 $6,900 $5,600 $4,

121 A 2.39 TUBULAR PRODUCT CASING Production casing is steel pipe that is cemented into place to stabilize the wellbore. The casing forms a major structural component of the wellbores and serves several important functions including; preventing the wellbore walls from collapsing, isolating different formations at various depths, and maintaining control of formation fluids and pressures as the well is drilled and completed. Notes: Wellbore casing is considered down-hole equipment when in place inside the wellbore. Down-hole equipment is exempt from taxation. However, casing that is stacked or stored on the surface is taxable until such time as it is employed downhole. Notes: RealWare 14 Yr. Life Values Indicated are Replacement Cost New (RCN) CASING (Stacked in Yard Only) INCHES OF DIA RCN 4 ½ $ $ ½ $ $ /8 $ /8 $ /8 $ ¾ $ ¾ $ /8 $ $ $ $40.40 Casing is assumed to be in New Condition, without pitting or heavy rust. Prices are the average per/ft of the most common grade & weight of quantities over 1,000 Ft. Prices include delivery up to 100 miles. For quantities less than 1,000 ft, add (10%) to RCN. 120

122 A 2.40 TUBING Tubing is similar to casing; however is smaller in diameter and it is assembled and inserted inside the larger diameter casing. Unlike casing, tubing is not used for structural support of the well, but is employed in the production of oil because it increases the viscosity of fluid. RealWare 14 Yr. Life Values Indicated are Replacement Cost New (RCN) TUBING (Stacked in Yard Only) INCHES OF DIA RCN 2 ⅜ $ ⅞ $ ½ $ $ ½ $8.80 Notes: CHROME TUMBING - MULTIPLY RCN X 3.5 Tubing prices may vary based on wall thickness, grade, length of joints, and the number of feet purchased. Estimated values are the average per/ft of the most common grade & weight per/ft. For quantities less than 1,000 ft, add (10%) to RCN. 121

123 A 2.41 FLOWLINES Flowlines are smaller diameter pipes that carry fluids or gas from the wellhead to an in-between vessel in separation, treating, heating, dehydrating, compression, pumping or other processing equipment generally located at or near the well site. Flowlines typically serve one wellhead. In multiple well fields, producers commonly lay flowline from individual wells to a central facility to perform subsequent production processes. RealWare 14 Yr. Life Values Indicated are Replacement Cost New (RCN) Notes: INCHES OF DIA RCN PER FOOT 2 FIBERGLASS $ FIBERGLASS $ FIBERGLASS $ STEEL $ STEEL $ STEEL $ STEEL $ STEEL $ STEEL $ STEEL $ STEEL $ STEEL $ STEEL $ STEEL $ STEEL $ STEEL $ STEEL $ STEEL $ STEEL $ STEEL $29.90 FOR INSTALLED PRICE MULTIPLY RCN X 2 For Insulated Flow Lines Multiply RCN by 1.25 Estimated values are for pipe only, and do not include installation. For installed pricing double the indicated (RCN). Prices are the average per/ft for the most common grade and weight per/ft. For quantities over 1,000 ft, add (10%) to RCN. 122

124 A FIBERGLASS BUILDINGS Fiberglass Telecom Shelter Fiberglass Control Building Fiberglass Building For Chemical Storage 123

125 RealWare 15 Yr. Life Values Indicated are Replacement Cost New (RCN) See Notes SQ FT TYPICAL 7 H 8 H X8 $650 $ X6 $650 $ X10 $830 $ X8 $900 $ X10 $1,090 $1, X8 $1,230 $1, X12 $1,380 $1, X10 $1,520 $1, X14 $1,590 $1, X16 $1,710 $1, X12 $1,760 $1, X10 $1,780 $1, X18 $1,900 $2, X14 $1,950 $2, X12 $2,000 $2, X16 $2,090 $2, X14 $2,185 $2, X18 $2,280 $2, X12 $2,280 $2, X16 $2,470 $2, X14 $2,540 $2, X18 $2,610 $2, X16 $2,760 $2, X20 $2,760 $2, X18 $2,800 $2, X20 $2,850 $2,990 Note: Fiberglass buildings may be depreciated using an effective age estimate based on a 15 year life and/or for the condition of the building. 124

126 A 2.43 CEMENTING / CEMENT HEADS Part of the process of preparing a well for further drilling, production, or abandonment is cementing. Cementing a well is the procedure of developing and pumping cement into place in a wellbore. Cementing is performed when cement slurry is deployed into the well via pumps, displacing the drilling fluids still located within the well and replacing them with cement. The cement flows to the bottom of the wellbore through the casing and fills in the space between the casing the actual wellbore. Before cementing begins the amount of cement must be determined along with the physical requirement of the cement. Special mixers including hydraulic jet mixers, recirculating mixers or batch mixers are used to combine dry cement with water to create the cement slurry. Different additives are combined with the slurry to prepare the cement to the required specification. Once the slurry is mixed, the cementing process is ready to begin. After casing is run into the well, an L-shaped cementing head is fixed to the top of the wellhead to receive the slurry from the pumps. Two wiper plugs, or cementing plugs, that sweep the inside of the casing and prevent mixing: the bottom plug and the top plug. Keeping the drilling fluids from mixing with the cement slurry, the bottom plug is introduced into the well, and cement slurry is pumped into the well behind it. The bottom plug is then caught just above the bottom of the wellbore by the float collar, which functions as a one-way valve allowing the cement slurry to enter the well. Then the pressure on the cement being pumped into the well is increased until a diaphragm is broken within the bottom plug, permitting the slurry to flow through it and up the outside of the casing string. After the proper volume of cement is pumped into the well, a top plug is pumped into the casing pushing the remaining slurry through the bottom plug. Once the top plug reaches the bottom plug, the pumps are turned off, and the cement is allowed to set. 125

127 RealWare 14 Yr. Life Values Indicated are Replacement Cost New (RCN) (Cement Heads Only) Size 4-1/2 Single Screw 8RD /2 Single Screw 8RD /2 Single Screw 8RD /2 Single Screw 8RD /2 Single Screw 8RD /8 Single Screw 8RD 5000 RCN $8,000 $8,400 $9,300 $10,000 $10,650 $11,400 Notes: Values include manifold, valves; lift chain, mechanical tattletale, pumping ports and spare parts kit. Values do not include landing joints which are considered expendable. Total useful life is estimated at 30 yrs. for cement heads only. 126

128 A 2.44 CEMENT BATCH MIXER RealWare 14 Yr. Life Values Indicated are Replacement Cost New (RCN) Size Weight Batch Mixer cu.ft. Weight Batch Mixer cu.ft. Weight Batch Mixer cu.ft. RCN $15,200 $18,500 $22,800 A 2.45 CEMENT LAB EQUIPMENT Notes: RealWare 14 Yr. Life Values Indicated are Replacement Cost New (RCN) Lab Equipment $36,600 Values include: Cement Test Equipment, Measuring & Recording Equipment Including, Viscometer, Rheometer, Ultrasonic Cement Analyzer & Consistometer. Estimated Value is an average for standard application of all the above mentioned components installed. 127

129 A 2.46 CEMENT STORAGE RealWare 14 Yr. Life Values Indicated are Replacement Cost New (RCN) Size RCN Cement Storage Skid/Field Bin 800 Cubic Feet $9,500 Cement Storage Skid/Field Bin 1000 Cubic Feet $11,400 Cement Storage Skid/Field Bin 1500 Cubic Feet $14,300 Cement Storage Skid/Field Bin 2000 Cubic Feet $18,100 Cement Storage Skid/Field Bin 3000 Cubic Feet $26,600 Cement Storage Skid/Field Bin 4000 Cubic Feet $33,

130 A 2.47 CEMENT TRAILER MOUNTED PUMPING UNIT Cement Pumping Unit is a high-pressure pump used to force cement down the casing and into the annular space between the casing and the wall of the borehole. The following value is for a Trailer mounted Cement unit w/ Triplex Cement Pumps, Cement Pod Internal Piping. RealWare 14 Yr. Life Values Indicated are Replacement Cost New (RCN) HP Powered By a 500 TO 750 HP Diesel Engine RCN $357,000 A 2.48 CEMENT TRAILER BULK TRANSPORT RealWare 14 Yr. Life Values Indicated are Replacement Cost New (RCN) HP Trailer Mounted Cement Bulk Transport W/double cement pods 600 cubic feet each RCN $85,

131 A 2.49 HIGH PRESSURE AIR COMPRESSOR UNIT / SKID MOUNTED RealWare 14 Yr. Life Values Indicated are Replacement Cost New (RCN) CFM 900 CFM P/B Cat or Detroit Diesel Engine, Water Separator, Fuel Tank, Safety Shutdowns, High & Low Pressure Switch W/Instrument Panel all skid Mounted CFM P/B Cat or Detroit Diesel Engine, Water Separator, Fuel Tank, Safety Shutdowns, High & Low Pressure Switch W/Instrument Panel all skid Mounted CFM P/B Cat or Detroit Diesel Engine, Water Separator, Fuel Tank, Safety Shutdowns, High & Low Pressure Switch W/Instrument Panel all skid Mounted CFM P/B Cat or Detroit Diesel Engine, Water Separator, Fuel Tank, Safety Shutdowns, High & Low Pressure Switch W/Instrument Panel all skid Mounted. RCN $44,500 $75,000 $95,000 $125,000 Notes: Values are estimated using a Sullair or Atlas Copco Compressor Units. 130

132 APPENDIX 3: COAL BED METHANE EQUIPMENT 131

133 A 3.1 COAL BED METHANE Coalbed methane is (natural gas) or methane that occurs in coal seams and has been generated during the conversion of plant material to coal (the process known as coalification). Although the methane (natural gas) found in coal seams is used the same as traditional natural gas associated with other liquid hydrocarbons; coal bed methane production is significantly different. Coal bed methane travels with ground water through coal seams and extraction of the methane involves pumping available water from the seam in order to reduce the water pressure that holds the gas into the seam. A downhole submersible pump produces water up the tubing; gas separates from the water and is produced up the annulus. Coal bed methane readily separates as pressure decreases allowing it be piped out of the well separately from the water. The natural gas and water produced at the individual wells can then be piped to metering facilities were the amount of production is recorded. The methane then flows to a compressor station where it can be compressed and set to transmission lines for sale/use. The water goes to a central discharge point at a drainage or impoundment. Due to the large amount of water produced along with the methane, each CBM well must be permitted as both a gas well and water well. The operator of the well, who has obtained a water well permit, is responsible for the water as well as the produced gas. Certain wells produce water that is generally suitable for human or livestock consumption and is generally discharged at the surface and runs off into surface drainages, or flows into ponds where it can seep back into the soil or evaporate. However, other production areas produce poor water quality in which the water is not allowed to be discharged into drainages. In these instances the producer may turn to a variety of other options for the collection, treatment and disposal of the waste water including; lined impoundments (evaporation ponds), chemical treatment, or re-injection of the water into other aquifers. Notes: Although the production methods of CBM are substantially different from traditional natural gas, the production equipment is similar with the exception of the wellhead. 132

134 A 3.2 CBM WELLHEADS Pods of Wellheads (Powder River Basin, WY). Each well is drilled into a different CBM coal seam. Setting Pod House over the wellhead. Coalbed Methane well enclosed in Pod House. Coalbed Methane Wellhead (Unenclosed) 133

135 Notes: TYPE RealWare 6 Yr. Life Used For Shallow CBM Wells RealWare 14 Yr. Life Used for Normal Depth CBM Wells Values Indicated are Replacement Cost New (RCN) WORKING PRESSURE RCN INSTALLED WELLHEADS RCN UNINSTALLED WELLHEADS THREADED PUMPING 500 PSI $1,050 $760 THREADED FLOWING 500 PSI $1,050 $760 THREADED PUMPING 1000 PSI $1,710 $1,330 THREADED FLOWING 1000 PSI $1,710 $1,330 THREADED PUMPING 3000 PSI $1,900 $1,430 THREADED FLOWING 3000 PSI $1,900 $1,430 THREADED PUMPING 5000 PSI $3,040 $2,380 THREADED FLOWING 5000 PSI $3,040 $2,380 A typical wellhead for CBM is 7 and range from 500 1,000 PSI. There are occurrences of wellheads rated at 3,000 5,000 PSI due to well pressures. Threaded heads are most common but flanged heads are sometimes used for initial well completions and later replaced with threaded heads. Prices include delivery up to 100 miles. Installation is estimated at 20% of (RCN) of uninstalled wellheads. The 20% includes installation materials, labor and overhead. (Ex): Excellent; used wellhead are estimated at 90% of (RCN). (GD): Good; used wellheads are estimated at 80% of (RCN). (FR): Wellheads in fair condition (needing repair) should not be used until they are rebuilt and recertified. The reason for higher percentages of RCN for 134

136 A 3.3 SWITCHES HDS (HEAVY DUTY SWITCHES) RealWare 14 Yr. Life Values Indicated are Replacement Cost New (RCN) DESCRIPTION RCN 30 AMP 600VOLTS $ AMP 600 VOLTS $ AMP 600 VOLTS $ AMP 600 VOLTS $1, AMP 600 VOLTS $1, AMP 600 VOLTS $1, AMP 600 VOLTS $2,400 INSTALLATION NOT INCLUDED A 3.4 AUTO ELECTRIC CONTROLS / PUMPS RealWare 14 Yr. Life Values Indicated are Replacement Cost New (RCN) DESCRIPTION RCN 3 HP $170 5 HP $240 7 ½ $ HP $ HP $ HP $ HP $ HP $ HP $ HP $ HP $ HP $ HP $1, HP $1,

137 A 3.5 CBM AUTO PILOT TELEM. AUTO PRODUCTION DATA TRANS. CBM AUTO PILOT TELEMETRY RealWare 10 Yr. Life Values Indicated are Replacement Cost New (RCN) DESCRIPTION RCN 1 WELL $3,000 MULTIPLE WELLS $5,000 Kimray Telemetry (Same as Telemetry) Notes: CBM AUTO TRANSMITTER / DATA TRANSMITTR RealWare 10 Yr. Life Values Indicated are Replacement Cost New (RCN DESCRIPTION RCN PER UNIT $2,400 CBM Auto Data Transmitters are normally included with Telemetry. Auto Data Transmitter are valued at (1/2) of the Telemetry Unit values. 136

138 A 3.6 CBM WATER PUMPS RealWare 14 Yr. Life Values Indicated are Replacement Cost New (RCN) SIZE RATING RCN 2 X 1 ½ 3 HP $1, X 1 ½ 5 HP $1,330 2 X 1 ½ 7 ½ HP $1,520 2 ½ X 2 5 HP $1,430 2 ½ X 2 7 ½ HP $1,640 3 X 2 ½ 5 HP $1,500 3 X 2 ½ 10 HP $1,850 4 X 2 5 HP $1,640 4 X 2 10 HP $2,000 4 X 2 15 HP $2,490 4 X 2 20 HP $2,850 4 X 3 5 HP $1,780 4 X 3 10 HP $2,280 4 X 3 15 HP $2,700 5 X 4 10 HP $2,570 5 X 4 15 HP $2,950 5 X 4 20 HP $3,140 5 X 4 30 HP $4,130 6 X 4 40 HP $4,350 6 X 4 50 HP $4,700 6 X 4 60 HP $5,410 6 X 4 75 HP $6,340 6 X 5 20 HP $3,350 6 X 5 30 HP $4,490 6 X 5 50 HP $5,200 6 X 5 75 HP $7,130 8 X 6 40 HP $4,560 8 X 6 60 HP $5,910 8 X 6 75 HP $7,910 8 X HP $9,500 8 X HP $11,

139 A 3.7 BARTON RECORDING CHART Barton chart recorders provide measurements on recorded pressures, differential pressure, and temperatures. RealWare 14 Yr. Life Values Indicated are Replacement Cost New (RCN) 1 PEN $1,250 2 PEN $1,800 3 PEN Most Common $3,800 A 3.8 FLOW BRACELET ANALYZER RealWare 14 Yr. Life Values Indicated are Replacement Cost New (RCN) TO 8 $950 8 Plus $1,

140 A 3.9 BLOWERS & CONTROLS FOR BLOWERS RealWare 14 Yr. Life Values Indicated are Replacement Cost New (RCN) DESCRIPTION SIZE RCN STANDARD 20 MCF / 3 MMCF $5,200 STANDARD 40 MCF $5,200 STANDARD 50 MCF $5,700 STANDARD 60 MCF $8,500 CONTROL FOR BLOWERS RealWare 14 Yr. Life Values Indicated are Replacement Cost New (RCN) SIZE RCN UP TO 3 HP $350 5 TO 10 HP $ TO 25 HP $1, TO 60 HP $2, TO 100 HP $4,600 A 3.10 CATALYTIC HEATER RealWare 14 Yr. Life Values Indicated are Replacement Cost New (RCN) TYPICAL - GAS $

141 A 3.11 CBM SUBMERSIBLE PUMP & MOTOR & CONTROLS Note: Please refer to Chapter 2.4 for clarification on exempt status of underground equipment. RealWare 14 Yr. Life Values Indicated are Replacement Cost New (RCN) SUBMERSIBLE PUMP & MOTOR SIZE RCN TO 5 $2, to 6 $3, to 7 $3, to 8 $3, to 9 $4, to 10 $4, to 11 $5,400 OVER 11 $6,000 + Sign means up to. SUBMERSIBLE PUMP CONTROLS SIZE RCN 600 VOLT $1,600 1,500 VOLT $6,700 2,500 VOLT $8,200 3,600 VOLT $11,

142 A 3.12 VARIABLE SPEED DRIVE FOR SUBMERSIBLE PUMPS RealWare 14 Yr. Life Values Indicated are Replacement Cost New (RCN) MEASUREMENT SIZE RCN 66 AMP 60 $20, AMP 80 $24, AMP 100 $25, KVA AUTO 100 $10, AMP 125 $28, KVA AUTO 125 $12, KVA AUTO 150 $13, AMP 160 $32, AMP 200 $37, KVA AUTO 200 $15, AMP 250 $39, KVA AUTO 250 $17, AMP 325 $47, AMP 350 $48, KVA AUTO 350 $20, KVA AUTO 400 $22, AMP 450 $59, AMP 500 $64, KVA AUTO 500 $24,200 A 3.13 CBM WATER FLOW ANALYZER RealWare 14 Yr. Life Values Indicated are Replacement Cost New (RCN) SIZE RCN TO 4 $300 6 to 7 $400 7 to 8 $500 8 & OVER $

143 A 3.14 MOVEABLE BUILDINGS RealWare 15 Yr. Life IGLOO HOUSE SIZE RCN 4 X 4 X 4 $1,100 4 X 6 X 4 $1,700 5 X 5 X 4 $1,800 5 X 5 X 5 $2,000 6 X 8 X 5 $3,800 6 X 8 X 6 $4,700 8 X 8 X 8 $8,300 P. O. D. HOUSES SIZE RCN 8 X 24 X 8 $3, X 14 X 8 $2, X 20 X 8 $3, X 30 X 8 $4, X 30 X 8 $5, X 20 X 8 $3, X 24 X 8 $4, X 14 X 8 $3,

144 A 3.15 ELECTRIC MOTORS / TEFC/ 1800 RPM RealWare 14 Yr. Life Values Indicated are Replacement Cost New (RCN) SIZE RCN 1 HP $400 2 OR 3 HP $500 5 HP $ HP $ HP $1, HP $1, HP $1, HP $2, HP $2, HP $3, HP $3, HP $4, HP $6, HP $9, HP $12, HP $13, HP $16, HP $17, HP $19, HP $23, HP $24,700 TEFC = Totally Enclosed and Cooled Installation Not Included 143

145 A 3.16 CBM SCREW COMPRESSORS RealWare 14 Yr. Life Values Indicated are Replacement Cost New (RCN) SIZE RCN 50 HP $29, HP $54, HP $100, HP $107, HP $133, HP $156, HP $166, HP $169, HP $235, HP $239, HP $361, HP $394, HP $736, HP $798, HP $855, HP $878, HP $897, HP $950, HP $1,045, HP $1,140,