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Woods County affirms omitted valuations for three drilling rigs, applies 20% statutory penalty
Summary
At a Woods County meeting, staff presented an omitted-property assessment for three stacked drilling rigs; the board voted to affirm the valuations and apply the statutory 20% penalty after discussion about condition, market comparables and whether the rigs had been scrapped.
Woods County officials voted to affirm omitted property valuations for three drilling rigs and to apply a statutory 20% penalty after staff presented photographs, sales-comparison data and a valuation schedule.
County staff told the board that the rigs in question — identified in the record as Nomad/77 Energy/Patterson rigs (numbers 26, 27 and 28 in staff materials) — were on county property and had been valued for tax-year 2022 using industry valuation schedules. Staff said the appraisal placed the rigs in a stacked/functional-but-depreciated condition and that the county’s assessor had set a per-rig market value used for the omitted assessment.
The issue matters because the rigs were identified in assessor files as removed or scrapped in some records, and the assessor’s office said they found the equipment still present a few miles north of town. Staff cited HADCO valuation schedules and the company purchase-price allocations in annual 10-K material as part of the market analysis.
During discussion staff summarized the history and condition: the rigs were originally built in 2006, Patterson acquired them after a 2016 bankruptcy of a prior operator, and values dropped from roughly $1.8 million per rig in earlier years to market evaluations closer to about $900,000 per rig in the 2020–2024 period because the rigs were stacked and market demand fell. Staff noted components such as mud pumps, draw works and blowout preventers appeared intact in photos; some items (for example, top drives) were absent from the photos and are recorded separately in inventory when present.
On the statutory penalty, a staff presenter said, “The assessor cannot waive the penalty. That’s a statute — 20% penalty,” and advised the board that the penalty must be applied when omitted property is added to the tax rolls. After questions about whether the rigs had been fully scrapped, whether salvage or component sales had occurred, and the basis for the HADCO schedule ranges, a board member moved to approve the omitted valuations as presented; another member seconded. The chair called for the vote; members responded in the affirmative and the motion passed.
The board’s action affirms the assessor’s omitted-property entries and applies the 20% statutory penalty; staff recorded the assessed amounts in the meeting packet (page references cited by staff). Staff said it would place the affirmed assessed values on the tax rolls for the listed years and noted that the penalty is mandatory under the statute referenced in the presentation.
Board discussion made clear that some uncertainty remains about whether portions of the rigs were dismantled or later sold as components; staff said their photographic and field-inspection evidence supported the omitted assessments for the tax years in question. The board did not direct additional investigation at the meeting; staff said they would proceed with the assessment entries that were affirmed.
