1999 ANNUAL REPORT
TAX

Industry Reaches Agreement with California Assessors
On Valuation of Oil Producing Properties

Following several years of confrontation and communication, agreement has been reached between the industry and tax assessors of nine California counties on a standard formula to determine the value of oil-producing properties for tax purposes. The procedure goes into effect on January 1, 2000.

The formula laid out in a memorandum of understanding will determine the projected future value of Kern River 13-Degree Crude Oil. The value of other grades of crude will be calculated using Kern River 13-Degree Crude Oil as a starting point and making adjustments based on oil price posting differentials. Signatories of the memorandum agreed not to challenge appraisals based on this formula in any property tax appeals process.

The document was signed by representatives of WSPA, the California Independent Petroleum Association and the Independent Oil Producers Agency along with the assessors of Kern, Fresno, Kings, Los Angeles, Monterey, Orange, San Luis Obispo, Santa Barbara and Ventura counties.

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