Statoil Wants Money Back From Local Counties
Company Claims It Overpayed $6.5 Million in Taxes
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WHEELING -- Norwegian shale driller Statoil wants officials in Ohio, Brooke, Wetzel and Marshall counties to refund nearly $6.5 million worth of property tax the company claims it overpaid, but local leaders believe they are under no obligation to return the money.
Marshall County commissioners already denied Statoil's refund request of $342,000, while commissioners in Ohio County rejected the firm's claim that it should regain $2.9 million. Commissioners in Wetzel County are still considering whether to refund $1.4 million to Statoil, while Brooke County commissioners are scheduled to hear from the company on Monday about its request for $1.8 million to be returned.
Brooke County Assessor Tom Oughton hopes commissioners deny Statoil's request, as he said the West Virginia State Tax Department does not require any refund to the company under the circumstances.
"Statoil had plenty of chances to figure this out. They dropped the ball," Oughton said.
Statoil began operating Marcellus Shale wells in the Northern Panhandle as a minority-interest partner with Chesapeake Energy approximately six years ago.
In Ohio County, Chesapeake owned 71 percent of each operation, with Statoil holding 29 percent. Statoil reduced its interest in local wells to 23 percent upon Chesapeake's $5 billion sale of its assets to Southwestern Energy in late 2014.
"Statoil USA Onshore Properties filed an exoneration motion in four West Virginia counties, Brooke, Wetzel, Marshall and Ohio, to request a refund for the 2015 property taxes. We are awaiting decisions on the hearings from Brooke and Wetzel counties. Marshall County and Ohio County have denied the request for refund and we are considering our appeal rights," company spokeswoman Lauren Shane said.
"We maintain that this was a clerical error," Shane continued. "The clerical error stems from over-reporting of revenue data for tax year 2015."
However, Northern Panhandle officials do not believe Statoil's action fits the definition of an unintentional clerical error.
"Statoil sought an exoneration for reduction in tax assessment based upon their failure to properly document various values of the oil and natural gas assets," Ohio County Solicitor Don Tennant said. "They have to prove it was a clerical error that was unintentional. The commission believes they failed to prove that."
"It was pure neglect on their part, as far as I could see," Ohio County Commissioner Orphy Klempa said.
Tennant said because the $2.9 million overpaid is property tax money, most of the funding goes toward public education.
In Wetzel County, Statoil is only one of numerous frackers producing oil and natural gas from the Marcellus and Utica shales. However, Assessor Scott Lemley and Commissioner Larry Lemon said the Norwegian driller is the only one asking for money to be refunded.
"The State Tax Department is not changing the value they have set on their working interest in Wetzel County," Lemley said. "We are just following the law."
"We held a hearing on this June 14. We are still deliberating," Lemon added. "We hope to make a decision soon."
Shane said Statoil is considering steps to appeal the unfavorable decisions at the county level. Tennant said the company could appeal to circuit court and, ultimately, to the West Virginia Supreme Court of Appeals if it chooses to do so.