Tax Law-US

West Virginia State Tax Department Forms & Instructions

WV STC-1235 — Oil and Gas Producer/Operator Return Instructions

preamble

FORM STC 12:35 WEST VIRGINIA OIL AND GAS PRODUCER/OPERATOR RETURN

INSTRUCTIONS

PLEASE NOTE: THESE INSTRUCTIONS ARE TO ASSIST YOU IN THE PREPARATION OF THE TAX RETURN. THEY ARE NOT A SUBSTITUTE FOR TAX LAW AND REGULATIONS. THIS RETURN MUST BE COMPLETED FOR EACH WELL. ONLY ONE WELL SHOULD BE REPORTED ON A SINGLE RETURN. THIS RETURN IS DUE ON OR BEFORE THE FIRST BUSINESS DAY OF AUGUST. Your failure to fi le this return in a timely manner will result in an estimate of your working interest value. In the event no previous year value is on record, a value will be estimated based on any information the State Tax Department can gather or infer concerning the production of the well. (See West Virginia Code § 11-3-10 for further information concerning failure to fi le this return.) PRODUCER NAME Please provide the company name or the name of the producing company. If you have sold or are no longer operating any well in any of the accounts, please identify the name and address of the new producer and the date on which the well was transferred. API # NRA # appraised by this the NRA account the report, shown is REQUIRED to be a specific eight-digit Please provide the unique Natural Resources Account (NRA) number that has been assigned to you well by the Property Tax Section. PLEASE NOTE NRA NUMBERS THAT WERE

PREVIOUSLY REPORTED WITH MULTIPLE WELLS ON A SINGLE NRA NUMBER WERE

CHANGED IN TAX YEAR 2022. Should you need a list of your current NRA numbers, please email or call the Property Tax Section. For wells that were began production in the calendar year being reported, the NRA number will be a ten (10) digit number created as follows: TD2024API# (The first 2 digits being the tax district, the next 4 being the tax year (2026) and the last 4 being the last four digits of the API number.) the NRA account which the well is the account number. the format is COUNTY NAME Please identify the name of the county in which this parcel/lease is located (or taxed). SCHEDULE 1: WELL/LEASE INFORMATION Please provide the well name/lease name or unique identifi er that is specifi c to this property.WELL/LEASE NAME ADDRESS, CITY, ST ATE, ZIP Please provide the company's complete mailing address. DBA, ATTN, AGENT If you are acting as agent for the producer/operator, please provide the agent company's name. PHONE If the office has questions regarding the fi ling of your return, please provide the telephone number of a contact. EMAIL Please supply an email address of the person who can answer questions about the data on the return. -1- PRODUCER CODE Please provide the producer code assigned to you by the state of West Virginia. Should you not know your producer code, please email or call the Property Tax Section for assistance. COUNTY NUMBER Please provide the 2 digit county code as used by the Property Tax Section. DO NOT USE DEP COUNTY CODES. Should you need a list of the county codes this office uses, please email or call the Property Tax Section for assistance. Enter the ten (10) digit American Petroleum Institute (API) well number.

SCHEDULE 2: PRODUCTION INFORM ATION Complete this section for the Previous calendar year. For example, the Tax Year 2026 form, sent on August 1, 2025, will reflect the well data for the calendar year 2024. 1. WELL STATUS *DO NOT DEDUCT ANY OPERATING EXPENSES OR ANY DEDUCTIONS CLAIMED ON SEVERANCE, INCOME AND/OR PROPERTY TAX, OR OTHER RETURNS. BE SURE THAT YOU ARE REPORTING ALL PRODUCTION FROM YOUR WELL. THIS INCLUDES ALL BY-PRODUCTS SUCH AS PROPANE, BUTANE, ETC. - 2 - 5. Under the OIL Column, list the total rounded production in BBLs for each identifiTOTAL BARRELS OF OIL ed well. DO NOT USE DECIMALS. OR MCFS OF GAS OR Under the GAS Column, list the total rounded production in MCF for each identifi ed well. 10. 0. interest receipts

RESOURCE

9.. ROYALTY INTEREST paid for the calender year. ROUND TO NEAREST WHOLE DOLLAR. listed on line 7.

TOTAL WORK INTEREST FROM

SCHEDULE 2 11. 1. Total amount of all Total amount of all working interest reported on schedule 2. Must be the sum of all 3 columns royalty

RECEIPTS PER Under each column, for the indicated resource, list the royalty

TOTAL ROYALTY INTERES T FROM SCHEDULE 2

IF PRODUCING NGLS, SELECT ONE

2. Butane Isobutane 3. INITIAL PRODUCTION DATE If producing NGLS, indicate which type of NGLS are being produced Ethane Propane Pentane RESOURCE* ROUND TO NEAREST WHOLE DOLLAR.

WORKING INTEREST

8. TOTAL RECEIPTS Under each column, for the indicated resource, list the total gross receipts received PER RESOURCE* RECEIPTS PER received for the calendar year (total receipts minus royalties/overriding royalties paid). 6. ROUND TO NEAREST WHOLE DOLLAR. (field line 7. TOTAL EXPENSES Under each column, for the indicated resource, list the total expenses for the calendar year. ROUND TO NEAREST WHOLE DOLLAR. Under each column, for the indicated resource, list the working interest receipts PER RESOURCE receipts) for the calendar year. PRODUCING FORMATION/ PLAY or subsurface strata from which this production occurred. If coded or abbreviated, please provide an explanation sheet to the Department. If Marcellus, list whether horizontal or vertical. FAILURE TO FILE THIS INFORMATION WILL RESULT

IN THE LOWEST DECLINE RATE BEING USED, THUS PRODUCING A HIGHER

APPRAISAL. RETURNS NOT NOTED WILL BE ASSUMED TO BE VERTICAL. Please provide the 2 - 3 digit code found in the variables for all producing formation(s) , List the initial year that this well began producing. If unavailable or unknown, leave blank. 4. NGLS interest reported on schedule 2. Must be the sum of all 3 columns ROYALTY interest(s), royalty listed on line Combined total of all 9. overriding royalty interests, and flat rate royalty interests reported on all pages of the schedule 3. 12. 2. SCHEDULE 3

TOTAL WORKING INTEREST FROM SCHEDULE 3 13.

INTEREST FROM

Combined total of all working interest(s) reported on all pages of the schedule 3. TOTAL Check the status of the well as: (A) Active (P) Plugged prior to 7/1/2025 (S) Shut in or volumes not sold for the entire past calendar year (E) Enhanced for an oil well involved in enhanced recovery (Z) Horizontal Marcellus/Utica (L) Horizontal other than Marcellus/Utica or Coalbed Methane (M) Vertical Marcellus/Utica (C) Vertical Coalbed methane (B) Began production after being shut-in the previous year (F) Flat rate royalty (H) Home use ONLY (no income reported or royalties paid) Failure to select the correct status will result in the return being rejected.

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INCOME

OWNER(S) NAME(S) Indicate the recipient of the working interest, royalty or overriding royalty income in Please provide an owner code. Every owner should have an owner code that is SCHEDULE 3: . WORKING INTEREST, ROYALTY, AND OVERRIDING ROYALTY OWNERS ADDRESS alphabetical order. In instances of more than one working interest partner, list Indicate: Give the current mailing address for those receiving income from this property. individually only if a separate tax ticket is requested. NOTE: If well is plugged or shutin and no income was received, list royalty owners only and their decimal interest. CODE • overriding royalty interest with "OR"; • royalty interest with "RI" ; • working interest as "WI". Any interest not coded will be assumed to be a royalty interest. well. DECIMAL INTEREST Indicate the decimal interest each party owns. NOTE: Working, royalty and overriding royalty interest should total 1.0 unless fl at rate royalties are involved. NOTE: Round to nearest whole dollar. Total income should equal total oil and/or gas receipts on Schedule 2. Any discrepancies between the amounts will be attributed to the producer. Any return that indicates royalty income was paid by a third party, unknown or not listed will have that income be attributed to the producer. No exceptions will be made. If the royalties are paid by another entity, this data is still required to be submitted with your return Owner codes are to be specific to the owner, not the

ADDITIONAL INSTRUCTIONS

All wells listed on the enclosed printout are required to be reported by your company unless they were sold prior to July 1, 2025. If sold, you must reply under separate cover listing NRA # and to whom sold (including complete name and address). If this data is not received and no return is fi led by the new company, those accounts will be treated as having not properly filed a return and the tax ticket may be assigned to your company. In addition, any new wells acquired must be reported. If wells were sold prior to July 1, 2025 total calendar year 2024 production data must be supplied to the reporting entity for full year reporting. The producing formation determines the nature of the future income stream (estimated life of the well) and, therefore, is a critical factor within the valuation process. Failure to provide this information will result in the use of lowest decline rate, thus yielding the highest value. You must provide duplicate copies of the return(s) to appropriate county assessors' offi ce. Do not provide the data in another format unless requested by the county assessor. If the royalties are not paid by you but are paid by another company, you must acquire this data from the other company before submission of your return. The Department will attribute royalties listed as paid by a third party, unknown or not given to the producer. No exceptions will be made. Notice of tentative appraisals may be provided if requested (and received) in writing prior to October 15 this year. You may mail, fax, or email your request. Requests received after that date will be processed, but information may not be received in time for changes/corrections to be made prior to closure of property books. After having carefully read all instructions, please sign and notarize. Note: One notarization for all returns is su ffi cient. Also, please make any name or address changes on label below notarization. Should you have additional questions or comments, please feel free to contact the Oil and Gas Unit at (304) 558-0781 or PTDOILGAS@wv.gov

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Source: official text