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Oil & Gas Taxation: The Benefits Of Technology & Automation

For oil and gas companies across the spectrum—upstream, midstream, and downstream—valuation of assets and the property tax process can be highly complex. By nature, several of the tasks involved are routine and mathematics-based—exactly the kind of tasks that computers excel at and, thanks to advanced technology, can do faster (and more accurately) than humans.

But is your tax team taking advantage of this technology yet? With McKinsey estimating that only 18% of the U.S. is currently operating at full digital potential, chances are good your oil or gas taxation team is missing out on the benefits of available technology advancements. (Tweet this!) Increased productivity, improved accuracy, and greater operational efficiencies are all byproducts of implementing the latest tech tools—and it’s not as hard as you think to get started.

This article serves as an oil and gas tax guide for upstream companies (those involved in exploration and production), and outlines the stages of the tax process where technology can be helpful.

Mineral Asset Values


The primary assets assessed of companies involved in the search for and recovery/production of crude oil and natural gas (besides the equipment) are the mineral values. Managing and tracking them are an important piece of any property tax system managing oil and gas properties.

Software like TotalPropertyTax (TPT) simplifies:

  • Managing your assets. Easily import or update well/lease data with the click of a button.

  • Preparing returns. Our one-click form generation populates all your asset data on returns forms, including custom attachments. It can generate hundreds of returns in minutes.

  • Filing returns. TPT verifies mailing addresses and key deadlines annually, reducing your information-gathering burden.

Download this free guide to find out which three tax trends are taking hold, and how they’ll make your team more valuable and productive.


Tracking/Managing Assessments


Oil and gas taxation usually involves multiple parties—everyone who has an interest in the land being worked. As a result, assessment notices may include a lot of data reflecting those multiple parties or accounts, including the working interest owner (the company handling exploration and drilling) and numerous royalty interest holders. Only the working interest owner files a property tax return; all the assessment data must be entered into that company’s system and evaluated to find opportunities for appeal.

Advanced software can ease the burden of data entry and analysis by:

  • Automating data entry. MetaTaskerPT is the only software using advanced smart process automation (SPA) technology to automate data entry. It performs data extraction from unstructured tax documents faster (typically less than a 24-hour turnaround time) and more accurately (greater than 99 percent) than an in-house team of humans. It then seamlessly imports data into TotalPropertyTax.

  • Clearly presenting comparative data and valuation differences. TPT provides a full picture of your property’s tax activity, and calculates percentage differences from the previous year for you.

Tracking & Paying Tax Bills


When it comes time to pay the bills, working interest owners receive a lump-sum bill that covers a number of wells. For purposes of accounting, that amount must then be apportioned to the various wells, and, on top of that, money must also be allocated and paid out to various royalty interest holders.

TotalPropertyTax can help in this stage by:

  • Handling tax allocation. Our software allocates tax amounts to wells for you for purposes of financial accounting and to simplify the payout process.

  • Automating the payment process. You can pay property tax bills directly from the software with just the click of a button, reducing the risk of incurring penalties or interest fees from late payments.

  • Tracking payouts. You can quickly identify upcoming payment due dates and payments made within our system.

Ready to talk with us about simplifying your tax process?


If you’re part of an oil and gas taxation team and are looking for a way to improve your current property tax processes, talk with us at CrowdReason. We’d like to help you leverage the power of our high-performing software so you can get more done in less time, and gain a competitive edge as a result. Contact us, or schedule a demo today.

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Topics: Property tax, Oil and gas property tax