| about the Author |
 Todd has over 16 years of public accounting experience and serves as the Director of Oil and Gas Taxation in the Denver office of HEIN & ASSOCIATES LLP. He assists both public and closely-held companies in the energy industry with domestic and international tax compliance, and consults with clients on a wide variety of matters, including tax structuring for entity purchases and sales, due diligence reviews for mergers, acquisitions, and private placement offerings. He also provides assistance in the formation and utilization of tax partnerships and drilling funds, ad valorem and property tax reviews, as well as FAS 109 deferred tax computation for public companies.
In addition to his focus in the energy industry, Todd is a member of the Council of Petroleum Accountants Society (COPAS). Prior to joining HEIN & ASSOCIATES LLP in 1993, he spent four years with KPMG LLP as a Senior Staff Member in Midland, Texas. He received his bachelor of science degree in business from Montana State University with an emphasis in accounting.
Todd can be reached at 303.296.9800 or tgress@heincpa.com.
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Interior Department Actively Takes Position
By Todd Gress, Director of Oil and Gas Taxation
Last year, the President appointed Ken Salazar of Colorado to be Secretary of the Department of the Interior. Following brief hearings, Mr. Salazar was unanimously confirmed in that position January 20, 2009. Since his appointment, Mr. Salazar has been extremely active in taking positions having an impact on the oil and gas industry, including:
- Stating that the Minerals and Management Service is beginning to terminate its royalty-in-kind program(R-I-K). He has previously indicated that the government has been deprived of revenue from oil and gas production from federal lands and waters because it has permitted producers to pay royalties "in-kind" rather than in cash. After receiving a portion of production in the form of oil or gas, the government then sells the production on the open market. Mr. Salazar stated that the R-I-K program will be phased out in an "orderly manner."
- Indicating that he will not back oil drilling near Utah’s Arches and Canyonlands National Parks or at the Dinosaur National Monument. He canceled a sale of oil and natural gas leases in these areas that was authorized during the Bush years. Also, the Interior Department is evaluating which of the 77 leases should be reinstated. One representative has said the administration is making it too difficult to drill for oil and gas, and another representative has questioned the economic effects of canceling these leases.
- Planning to review policy changes made during the Bush administration. These changes gave exclusive benefits to energy companies that purchased oil-shale leases in Colorado, Utah, and Wyoming. The revisions included a "bargain" 5% royalty rate on oil and gas generated if the ventures became commercially successful.
- Asking the Interior Department to collect public comments on possible strategies for developing oil and gas resources in the Outer Continental Shelf. After the expiration of the six-month comment period, Salazar reported that more than 350,000 comments were received. The Minerals and Management Service is evaluating the comments, and will conduct an environmental review and "public scoping opportunities" linked to the creation of a five-year plan. The program has a goal of resolving energy-security problems while representing the views of "local communities, states and tribal nations."
Other articles in this newsletter:
Year in Review
Industry Goes on the Defense
Supreme Court Declines Oil Royalties Case
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1st Quarter, 2010
