SUBLETTE COUNTY – Jonah Energy’s Paul Ulrich and Ashley Wolicki, with Sublette County treasurer Emily Paravicini, went over the producer’s proposed repayment of ad valorem property taxes of $98.03 million for the second half of 2023 and all of 2024.

They appeared before Sublette County commissioners chair SamWhite, Dave Stephens, Doug Vickrey, Tom Noble and Mack Bradley at their Nov. 6 meeting.

They also brought up past-due ad valorem taxes from 2015 and 2016, Ulrich explaining the taxes’ complex legislative history. Oil and gas producers statewide were moved to monthly payments unless a county exempted them, setting up contracts with terms to maintain annual payments.

Ulrich said he opposed the monthly ad valorem payments legislation because he “felt it penalized (ad valorem) tax payers, unfair to those who paid on time.” In 2020, Jonah Energy and the county worked out repayment terms; Ulrich said Jonah has never missed a payment.

He said Jonah considered posting a surety bond, a solution “to assure the county we’re going to pay our tax bills, which we always have. But we were looking at $800,000 to $1 million” that would put a financial strain on the private company.

Some producers remained with annual payments over the 13-year period.

In 2020, operators who went to monthly payments were required to pay 8 percent of the second half of 2021 and all of 2022 ad valorem taxes over a 13-year timeframe, which starts in December.

Oil and gas companies across the state start paying back on a 13-year schedule at 8 percent. Jonah will owe almost $98 million in deferred taxes for the second half of 2023 and all of 2024.

Ulrich said they felt it was “equitable” to combine the two county payments over a 10-year period and on Jan. 1, 2024, Jonah Energy will move to pay ad valorem taxes monthly to the state. He said Jonah’s paying due taxes monthly would mean less risk to Sublette County and would pledge that if the producer missed one payment, it would stick to “one strike and you’re out.”

“Payment terms for others is 13 years and they pay annually,” Wolicki said. “And we ask for 10 years and pay monthly. We would actually pay two years earlier than the annual payers.”

Where commissioners previously talked about sticking to the deal already made, this time they budged.

Noble pointed out the payments over the next 10 years could give future commissioners “some comfort.”

Vickrey told Ulrich, “We’re betting on the future – what happens if they pull the rug completely out from underneath you folks? Can you still commit to these numbers?”

“What if the feds come in and shut us down completely,” Ulrich said, adding everyone would go down. “The impacts would be devastating to the county.”

White said Jonah Energy is “highly valued in our county and our community. We are great partners.”

Paravicini said a war is being waged across the West and with the energy industry. “The fact they are willing to make monthly payments to the state and they are willing to make monthly payments to the county – what keeps them operating keeps us operating.”

Bradley supported the change if Jonah could handle the payments.

“We’re all (ready to) accept a 10-year payment with a one-strike policy and the rest you pay monthly on the 2^nd of each month,” White said.

“Our goal was to come to the table with an equitable agreement that reduces your risk and we believe we did that,” Ulrich said.

White asked the Sublette County Attorney’s Office to draft new terms.