tax year tax year 20212015 - latax.state.la.us · supporting documentation to laa recommendations -...

TAX YEAR 2015TAX YEAR 2021

SUPPORTING DOCUMENTATION

TO PROPOSED RECOMMENDATIONS

BY THE

LOUISIANA ASSESSORS’ ASSOCIATION (LAA)OIL & GAS COMMITTEE

TO THE

LOUISIANA TAX COMMISSION (LTC)

FOR

Submitted: June 26, 2020

TABLE OF CONTENTSLAA Supporting Documentation

Tax Year 2021

Chapter 9: Oil and Gas Properties

No documentation for Joint Proposal

Chapter 11: Drilling Rigs and Related Equipment

A. Drilling Rigs (Good Condition)B. Well Service Rigs

Chapter 13: Pipelines

A. Index/Trend CalculationsB. Schedule Value Derivation, Onshore PipelinesC. Schedule Value Derivation, Offshore Pipelines

LAA Supporting Documentation

CHAPTER 11: Drilling Rigs and Related Equipment

Supporting Documentation to LAA Recommendations - Tax Year 2021

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)Historical Drilling Rig Prices (Good Condition)*

Thousand Dollars

Up to 2500' 2501' to 5000' 5001' to 7500'

7501' to 10,000' 10,000' to 12,500' 12,501' to 15,000'

15,001' to 17,500' 17,501' to 20,000' Above 20,000'

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LAA.2021.Proposal.Support.DR.xlsx - 6/25/2020 Pritchard & Abbott, Inc. Page 1 of 4


Interpolated TrendedDepth Rig Value Rig Value Difference Trended

(ft) ($) ($) ($) $/ft1 3,000 194,100 193,900 (200) $64.632 4,000 267,800 287,600 19,800 $71.903 5,000 318,800 311,000 (7,800) $62.204 6,000 369,800 340,400 (29,400) $56.735 7,000 471,800 424,800 (47,000) $60.696 8,000 590,800 590,700 (100) $73.847 9,000 773,500 845,100 71,600 $93.908 10,000 1,147,500 1,179,500 32,000 $117.959 11,000 1,521,500 1,573,700 52,200 $143.0610 12,000 1,997,500 1,999,700 2,200 $166.6411 13,000 2,507,500 2,425,100 (82,400) $186.5512 14,000 2,941,000 2,817,000 (124,000) $201.2113 15,000 3,145,000 3,145,900 900 $209.7314 16,000 3,349,000 3,389,300 40,300 $211.8315 17,000 3,451,000 3,535,700 84,700 $207.9816 18,000 3,519,000 3,552,021 33,021 $197.3317 19,000 3,570,000 3,567,100 (2,900) $187.7418 20,000 3,570,000 3,570,000 - $178.5019 21,000 3,570,000 3,534,300 (35,700) $168.3020 25,000 3,570,000 3,355,800 (214,200) $134.23

TAX YEAR 2021

Louisiana Drilling Rig Value ScheduleLand-Based Only (Good Condition)

Values shown represent most currently available data at time of this analysis: 1st-qtr, 2020.

y = 31.305x5 - 1584.4x4 + 26483x3 - 157200x2 + 402673x - 75786R² = 0.9984

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Louisiana Drilling Rig ValuesLand Based Only - GOOD CONDITION*

Data Points Modified Curve Poly. (Data Points)

Note: Some points from curve fit below may need to be modified in table at left in order to recognize fixed costs inherent in the raw data (for very shallow depths) and indefinite depth range (for deepest depth). Those modified points (if any) are shown in italics in table at left, and as any data points labeled as "Modified Curve" that deviate from the curve fit on the plot below.

LAA.2021.Proposal.Support.DR.xlsx (6/25/2020) PRITCHARD & ABBOTT, INC. Page 2 of 4


(LTC Rules and Regulations Table 1103.A - bold font below)

Current (Good) Previous (Good) Percent DollarDepth Tax Year 2021 Tax Year 2020 Change Change

1 3,000 $193,900 $275,800 -29.7% ($81,900)2 4,000 $287,600 $357,200 -19.5% ($69,600)3 5,000 $311,000 $397,312 -21.7% ($86,312)4 6,000 $340,400 $456,300 -25.4% ($115,900)5 7,000 $424,800 $568,900 -25.3% ($144,100)6 8,000 $590,700 $776,700 -23.9% ($186,000)7 9,000 $845,100 $1,089,100 -22.4% ($244,000)8 10,000 $1,179,500 $1,498,800 -21.3% ($319,300)9 11,000 $1,573,700 $1,985,600 -20.7% ($411,900)10 12,000 $1,999,700 $2,519,500 -20.6% ($519,800)11 13,000 $2,425,100 $3,064,700 -20.9% ($639,600)12 14,000 $2,817,000 $3,582,300 -21.4% ($765,300)13 15,000 $3,145,900 $4,034,700 -22.0% ($888,800)14 16,000 $3,389,300 $4,388,200 -22.8% ($998,900)15 17,000 $3,535,700 $4,617,000 -23.4% ($1,081,300)16 18,000 $3,552,021 $4,706,500 -24.5% ($1,154,479)17 19,000 $3,567,100 $4,657,000 -23.4% ($1,089,900)18 20,000 $3,570,000 $4,486,600 -20.4% ($916,600)19 21,000 $3,534,300 $4,023,630 -12.2% ($489,330)20 25,000 $3,355,800 $3,372,970 -0.5% ($17,170)

averages: $2,031,931 $2,542,941 -21.1% ($511,010)

Total Value, Drilling RigsComparison of Current Tax Year to Previous Tax Year

Tax Year 2021


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Louisiana Drilling Rig Value (Land-Based, Good Condition)*Comparison to Previous Year

Current (Good)

Previous (Good)



(LTC Rules and Regulations Table 1103.D - bold font below)

CURRENT MIDPOINT DEPREC(a) @

CURRENT 100%

PREVIOUS 100%

CHANGE FROM

CLASS MAST ENGINE RCN ($)* 60.0% RCNLD ($) RCNLD ($) PREV (%)I 71' X 125M# C-7 237,500 142,500 95,000 105,000 -9.5%

(100) 71' X 150M# 50 SERIES72' X 150M# 6V7172' X 125M#75' X 150M#

II 96' X 150M# C-11 337,500 202,500 135,000 145,000 -6.9%(200) 96' X 180M# 50 SERIES

96' X 185M# 8V7196' X 200M#96' X 205M#96' X 210M#96' X 212M#96' X 215M#

III 96' X 240M# C-11 425,000 255,000 170,000 185,000 -8.1%(300) 96' X 250M# 50 SERIES

96' X 260M# 8V92102' X 215M#

IV 102' X 224M# C-15/C-13 500,000 300,000 200,000 225,000 -11.1%(400) 102' X 250M# 60 SERIES

103' X 225M# 12V71103' X 250M#104' X 250M#105' X 225M#105' X 250M#

V 105' X 280M# C-15/C-13 575,000 345,000 230,000 265,000 -13.2%(500) 106' X 250M# 60 SERIES

108' X 250M# 12V71108' X 260M# 12V92108' X 268M#108' X 270M#108' X 300M#

VI 110' X 250M# C-15 662,500 397,500 265,000 315,000 -15.9%(600) 110' X 275M# 60 SERIES

112' X 300M# 12V71112' X 350M# (2) 8V92

VII 117' X 350M# (2) C-18 775,000 465,000 310,000 375,000 -17.3%(700) (2) 60 SERIES

(2) 8V92 (2) 12V71


(a) Default depreciation rate assumes effective age of all rigs is nearer the end of the service life versus brand new.

Well Service RigsTax Year 2021


LAA Supporting Documentation

CHAPTER 13: Pipelines


Summary of Trending Factor CalculationsIndex Data for Pipelines

Tax Year 2021

* Yearly averages in Handy-Whitman are calculated using the "January 1" points that begin and end the year (the January that begins one year is the same January that ends the previous year) in a weighted average formula that weights the July data point by 2. Due to timing, sometimes the most recent January data point is not available and must be estimated. When this happens, this estimated data point needs to be revised with the actual figure for the following tax year's study. This revision can result in a recommended percentage change in value from the previous tax year materially different than thechange suggested by the current raw data alone.

** Derived by a simple average of the four (4) previous quarterly Marshall & Swift index points that are titled with the given calendar year (e.g., for calendar year 2005, the relevant points to use are those shown for 01/2005, 04/2005, 07/2005, and 10/2005).

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Historical Trend Data for PipelinesRaw Data Indexed to Most Recent Year

Yearly Change HANDY-WHITMAN* MARSHALL & SWIFT** AVERAGE

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The most recent year shown in raw data curves contains estimated index data due to COVID‐19 effects on the oil and gas

LAA.2021.Proposal.Support.REVISED FOR COVID19.xlsx (6/25/2020) / Pritchard & Abbott, Inc. / Page 1 of 10


Cost Data from Oil & Gas Journal

PIPE YEAR TOTAL TOTAL ORIGINAL TREND CURRENT WEIGHTED AVGDIAMETER INSTALLED MILES ORIG COST COST/MILE FACTOR RCN/MILE Weight RCN/MILE

4 1976 25.75 $2,882,184 $111,929 3.78011 $423,106 100.0% $423,1066 1986 2.50 260,665 $104,266 2.26460 $236,120 39.9% |6 1987 3.77 586,000 $155,438 2.24350 $348,725 60.1% $303,8278 1980 7.84 1,513,130 $193,001 2.69253 $519,662 100.0% $519,66210 1981 9.93 3,526,000 $355,086 2.39269 $849,611 41.6% |10 1982 13.94 6,733,000 $482,999 2.22072 $1,072,604 58.4% $979,83812 1980 13.33 5,031,000 $377,419 2.69253 $1,016,214 15.1% |12 1981 5.17 3,101,800 $599,961 2.39269 $1,435,524 5.9% |12 1984 0.50 249,430 $498,860 2.28163 $1,138,214 0.6% |12 2006 17.50 11,449,067 $654,232 1.35585 $887,039 19.8% |

E 12 2016 51.78 66,204,428 $1,278,571 1.10639 $1,414,596 58.7% $1,249,52316 1988 45.00 10,664,699 $236,993 2.13811 $506,718 99.6% |

E 16 2008 0.50 2,323,342 $4,646,684 |A 16 2017 0.17 302,100 $1,777,059 1.06611 $1,894,541 0.4% |E 16 2018 0.30 3,971,214 $13,237,380 $511,942

20 1981 32.23 14,000,000 $434,378 2.39269 $1,039,334 34.6% |20 1985 2.50 1,048,340 $419,336 2.28988 $960,228 2.7% |20 1986 50.00 13,701,686 $274,034 2.26460 $620,576 53.7% |

A 20 1991 5.60 1,801,575 $321,710 2.09132 $672,798 6.0% |A 20 1992 2.86 1,666,181 $582,581 2.09636 $1,221,300 3.1% |E 20 2014 0.80 4,521,673 $5,652,091 |E 20 2017 0.72 5,075,642 $7,049,503 $796,091E 22 1999 2.30 2,471,700 $1,074,652 1.85743 $1,996,088 100.0% $1,996,088

24 1976 63.00 14,144,371 $224,514 3.78011 $848,687 44.4% |24 1978 16.30 11,829,635 $725,744 3.22989 $2,344,074 11.5% |24 1985 9.10 4,359,005 $479,012 2.28988 $1,096,877 6.4% |

E 24 1986 51.27 31,054,900 $605,713 2.26460 $1,371,696 36.1% |24 2007 2.30 4,191,141 $1,822,235 1.28943 $2,349,639 1.6% $1,249,477

E 26 1991 100.20 58,869,868 $587,524 2.09132 $1,228,699 71.8% |E 26 1993 39.40 22,671,560 $575,420 2.08873 $1,201,897 28.2% $1,221,135

30 1976 28.00 10,413,424 $371,908 3.78011 $1,405,853 6.1% |30 1980 65.20 42,843,670 $657,112 2.69253 $1,769,294 14.3% |30 1982 0.90 1,269,800 $1,410,889 2.22072 $3,133,187 0.2% |30 1985 35.00 31,147,635 $889,932 2.28988 $2,037,835 7.7% |

E 30 1990 222.50 155,513,380 $698,937 2.09710 $1,465,738 48.8% |E 30 1995 1.20 5,747,000 $4,789,167 |A 30 1997 16.00 29,333,507 $1,833,344 1.88273 $3,451,695 3.5% |E 30 2000 41.70 41,076,000 $985,036 1.83613 $1,808,656 9.1% |A 30 2004 41.90 41,267,261 $984,899 1.57139 $1,547,663 9.2% |A 30 2016 3.80 16,290,064 $4,286,859 1.10639 $4,742,929 0.8% |E 30 2017 0.76 4,310,100 $5,671,184 1.06611 $6,046,109 0.2% $1,696,300

36 1978 26.70 24,420,238 $914,616 3.22989 $2,954,106 4.3% |36 1980 54.20 49,693,010 $916,845 2.69253 $2,468,635 8.8% |36 1982 8.71 7,212,279 $828,046 2.22072 $1,838,857 1.4% |

E 36 1992 24.00 22,206,922 $925,288 2.09636 $1,939,739 3.9% |E 36 1993 12.00 12,067,290 $1,005,608 2.08873 $2,100,442 1.9% |E 36 2003 35.00 73,448,617 $2,098,532 1.76170 $3,696,980 5.7% |E 36 2005 85.00 247,953,578 $2,917,101 1.42487 $4,156,477 13.8% |E 36 2007 1.00 4,056,369 $4,056,369 1.28943 $5,230,390 0.2% |A 36 2007 22.80 40,845,140 $1,791,454 1.28943 $2,309,948 3.7% |A 36 2007 45.00 158,948,005 $3,532,178 1.28943 $4,554,484 7.3% |A 36 2008 58.50 253,333,532 $4,330,488 1.19873 $5,191,074 9.5% |A 36 2009 4.43 20,953,729 $4,729,961 1.20051 $5,678,368 0.7% |A 36 2011 196.00 716,484,185 $3,655,532 1.16325 $4,252,302 31.8% |E 36 2015 34.10 218,600,000 $6,410,557 1.08593 $6,961,435 5.5% |A 36 2017 8.00 45,202,055 $5,650,257 1.06611 $6,023,798 1.3% |E 36 2017 11.00 335,803,621 $30,527,602 $4,052,147

cont. next page

***deleted as outlier***

Pipeline Construction Projects - 1976 To Most Current Available (2019)1

Source: Oil & Gas Journal (Annual Pipeline Economics Issue)

LOUISIANA PIPELINES - ONSHORE(Excludes River & Canal Crossings)

TAX YEAR 2021











TAX YEAR 2021


E 42 1981 46.52 137,974,022 $2,965,908 2.39269 $7,096,511 2.8% |E 42 1983 50.59 48,779,950 $964,221 2.28067 $2,199,071 3.1% |E 42 2005 64.69 223,606,000 $3,456,578 1.42487 $4,925,159 3.9% |E 42 2007 239.00 588,723,000 $2,463,276 1.28943 $3,176,214 14.5% |E 42 2007 353.00 1,251,584,954 $3,545,566 1.28943 $4,571,748 21.5% |A 42 2009 153.00 583,188,184 $3,811,687 1.20051 $4,575,971 9.3% |A 42 2010 132.00 1,002,775,967 $7,596,788 1.21484 $9,228,916 8.0% |A 42 2011 172.00 707,348,710 $4,112,493 1.16325 $4,783,862 10.5% |A 42 2012 174.00 640,976,789 $3,683,775 1.11148 $4,094,424 10.6% |A 42 2012 20.60 78,291,460 $3,800,556 1.11148 $4,224,224 1.3% |E 42 2013 21.00 153,014,000 $7,286,381 1.11811 $8,146,997 1.3% |E 42 2014 17.89 157,328,128 $8,794,194 1.07170 $9,424,724 1.1% |E 42 2016 42.70 344,545,279 $8,068,976 1.10639 $8,927,418 2.6% |E 42 2017 11.00 378,563,920 $34,414,902 |E 42 2017 11.70 111,393,202 $9,520,786 1.06611 $10,150,210 0.7% |E 42 2017 15.10 172,906,634 $11,450,770 1.06611 $12,207,786 0.9% |E 42 2018 131.00 1,207,584,005 $9,218,199 1.01233 $9,331,826 8.0% $5,423,188E 48 2017 74.00 559,664,206 $7,563,030 1.06611 $8,063,025 100.0% $8,063,025

TOTALS: 3,315.75 $10,709,229,951

1

2

NOTE: Segments denoted by bold font above have been added to this study for this tax year and/or have replaced estimated costs in previous studies with actual costs per updated FERC data. Selected segments have been designated as statistical outliers due to their stated cost, when trended to current, being multiples of apparent prevailing current cost per mile for the related diameter size; these outliers are subsequently disregarded in the calculation of weighted average RCN.

Oil & Gas Journal data is provided as either estimated (or "current" per past OGJ nomenclature) or actual costs per FERC filings for the 12-month period ending June 30 of the year indicated for each segment in the database shown above. Most recent O&GJ report is from their Oct. 7, 2019 issue. Not all pipelines proposed (estimated) are built (actual). Some projects are proposed many years prior to being built, and some projects are built different from proposed in terms of mileage or diameter size; either or both of these conditions may warrant a project being listed more than once in the database shown above. Our intent is to list a single project only once.

Weighting component is Total Miles for each segment listed.


(E)stimated or (A)ctual. See footnote below.






TAX YEAR 2021

Comparison of RCN Per MileOnshore Pipelines(LTC Rules and Regulations Table 1307.A - bold font below)

"y"

TRENDED CURRENT YR Previous Year O&GJ DATA CURVILINEAR Curvilinear Change

DIAMETER LOUISIANA REGRESSION Regression From "x" (INCHES) PIPELINES ANALYSIS Analysis Prev Year 1 2 187,200 186,950 0.1%2 4 423,106 221,070 220,560 0.2%3 6 303,827 261,070 260,200 0.3%4 8 519,662 308,300 306,970 0.4%5 10 979,838 364,080 362,150 0.5%6 12 1,249,523 429,960 427,250 0.6%7 14 507,750 504,040 0.7%8 16 511,942 599,610 594,640 0.8%9 18 708,100 701,530 0.9%10 20 796,091 836,220 827,620 1.0%11 22 1,996,088 987,510 976,390 1.1%12 24 1,249,477 1,166,180 1,151,890 1.2%13 26 1,221,135 1,377,170 1,358,940 1.3%14 28 1,626,340 1,603,200 1.4%15 30 1,696,300 1,920,590 1,891,370 1.5%16 32 2,268,080 2,231,340 1.6%17 34 2,678,430 2,632,420 1.7%18 36 4,052,147 3,163,030 3,105,590 1.8%19 38 3,735,310 3,663,810 2.0%20 40 4,411,130 4,322,370 2.1%21 42 5,423,188 5,209,230 5,099,300 2.2%22 44 6,090,200 5,955,730 2.3%23 46 7,010,470 6,884,310 1.8%24 48 $8,063,025 8,150,170 8,038,010 1.4%

Note: Not all diameters in this table have corresponding cost data from the Oil & Gas Journal for the history years analyzed. They are in this table mainly as "placeholders" so that the "x" scale on chart is spaced evenly for curve fitting purposes. Certain points have been disregarded for most appropriate curve fit. Results of curve fit have been adjusted downwards in selected instances to avoid excessive difference with the O&GJ raw cost data. No results of curve fit have been adjusted upwards.

Calculated using formula associated with curve fit on chart: y = 158521e0.1663x

NOTE: "x" in the formula above represents the linear sequence of the diameters (the independent variable on the x axix); i.e., in this case, x equals 1 for 2-inch diameter pipe, x equals 2 for 4-inch diameter pipe, and so on.






TAX YEAR 2021

Summary Curve, Onshore Pipelines

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Comparison of RCN Per Mile LOUISIANA ONSHORE PIPELINES

Oil & Gas Journal Regression Fit Previous Year

Note: Data points on chart with no fill (if any) have been deemed "outliers" and have subsequently been disregarded for curve fitting purposes.

CURRENT YRy = 158521e0.1663x

R2 = 0.9843




Cost Data from Oil & Gas Journal


6 1977 7.04 $1,608,895 $228,536 3.53856 $808,688 24.9% |6 1980 7.30 3,590,019 $491,783 2.69253 $1,324,143 25.8% |6 1981 7.89 9,738,876 $1,234,332 2.39269 $2,953,378 27.9% |6 1982 0.89 1,686,460 $1,894,899 2.22072 $4,208,037 3.1% |6 1986 0.30 666,660 $2,222,200 2.26460 $5,032,388 1.1% |6 1988 4.90 2,813,528 $574,189 2.13811 $1,227,682 17.3% $1,763,1388 1978 6.50 2,428,400 $373,600 3.22989 $1,206,686 24.5% |8 1980 18.25 8,838,130 $484,281 2.69253 $1,303,942 68.9% |8 1982 1.74 3,969,000 $2,281,034 2.22072 $5,065,535 6.6% $1,527,15910 1978 4.20 1,725,000 $410,714 3.22989 $1,326,561 11.5% |10 1980 2.30 2,327,110 $1,011,787 2.69253 $2,724,269 6.3% |10 1981 16.80 16,586,000 $987,262 2.39269 $2,362,216 46.0% |10 1982 2.90 6,945,000 $2,394,828 2.22072 $5,318,238 7.9% |10 1983 2.40 3,000,000 $1,250,000 2.28067 $2,850,838 6.6% |10 1986 3.90 2,800,000 $717,949 2.26460 $1,625,865 10.7% |10 1988 4.02 3,073,702 $764,602 2.13811 $1,634,806 11.0% $2,374,05012 1976 10.90 3,816,287 $350,118 3.78011 $1,323,484 5.6% |12 1977 5.14 3,930,755 $764,738 3.53856 $2,706,069 2.7% |12 1978 43.41 23,325,951 $537,340 3.22989 $1,735,550 22.5% |12 1980 10.10 5,023,280 $497,354 2.69253 $1,339,143 5.2% |12 1981 42.74 41,948,085 $981,471 2.39269 $2,348,361 22.1% |12 1982 33.88 45,423,679 $1,340,723 2.22072 $2,977,367 17.6% |12 1983 4.90 4,700,000 $959,184 2.28067 $2,187,582 2.5% |12 1984 7.60 4,525,290 $595,433 2.28163 $1,358,557 3.9% |12 1988 34.30 12,591,000 $367,085 2.13811 $784,868 17.8% $1,898,78214 1983 11.50 7,900,000 $686,957 2.28067 $1,566,721 100.0% $1,566,72116 1977 9.60 6,723,287 $700,342 3.53856 $2,478,201 4.1% |16 1978 79.17 48,907,595 $617,754 3.22989 $1,995,277 34.2% |16 1980 45.30 25,378,082 $560,223 2.69253 $1,508,417 19.5% |16 1981 10.50 12,752,900 $1,214,562 2.39269 $2,906,075 4.5% |16 1982 10.20 14,170,729 $1,389,287 2.22072 $3,085,215 4.4% |16 1987 0.30 275,326 $917,753 2.24350 $2,058,981 0.1% |16 1988 36.79 24,475,710 $665,282 2.13811 $1,422,447 15.9% |

E 16 1991 26.63 17,028,020 $639,430 2.09132 $1,337,252 11.5% |E 16 1993 13.25 7,350,000 $554,717 2.08873 $1,158,654 5.7% $1,795,045E 18 1997 26.20 21,363,819 $815,413 1.88273 $1,535,204 100.0% $1,535,204

20 1978 23.96 20,151,298 $841,039 3.22989 $2,716,463 10.2% |20 1980 15.82 9,010,000 $569,532 2.69253 $1,533,484 6.7% |20 1981 75.28 66,339,490 $881,237 2.39269 $2,108,530 32.0% |20 1982 28.28 21,348,890 $754,911 2.22072 $1,676,445 12.0% |20 1983 20.10 17,788,000 $884,975 2.28067 $2,018,336 8.5% |20 1988 56.13 43,527,067 $775,469 2.13811 $1,658,040 23.8% |

E 20 1995 5.05 2,755,000 $545,545 1.99344 $1,087,510 2.1% |E 20 1997 10.80 10,569,525 $978,660 1.88273 $1,842,554 4.6% $1,930,643

cont. next page

TAX YEAR 2021LOUISIANA PIPELINES - OFFSHORE








PIPE YEAR TOTAL TOTAL ORIGINAL TREND CURRENT WEIGHTED AVGDIAMETER INSTALLED MILES COST COST/MILE FACTOR RCN/MILE Weight RCN/MILE

24 1977 20.05 13,418,858 669,270 3.53856 2,368,248 4.8% |24 1980 44.10 37,503,240 850,414 2.69253 2,289,766 10.5% |24 1983 26.97 32,633,000 1,209,974 2.28067 2,759,552 6.4% |24 1985 18.43 17,122,825 929,074 2.28988 2,127,464 4.4% |24 1987 13.00 12,400,674 953,898 2.24350 2,140,072 3.1% |24 1988 86.18 72,470,262 840,917 2.13811 1,797,976 20.6% |

A 24 1994 13.00 14,549,383 1,119,183 2.05672 2,301,851 3.1% |E 24 1997 104.00 86,427,876 831,037 1.88273 1,564,620 24.8% |A 24 1999 52.40 39,165,281 747,429 1.85743 1,388,295 12.5% |A 24 2000 9.65 12,000,000 1,243,523 1.83613 2,283,273 2.3% |A 24 2005 31.00 37,477,301 1,208,945 1.42487 1,722,585 7.4% |A 24 2008 6.23 52,334,300 8,400,369 $1,876,144

30 1976 47.10 21,833,624 463,559 3.78011 1,752,303 12.9% |30 1977 18.10 16,242,733 897,389 3.53856 3,175,460 5.0% |30 1978 98.80 84,300,760 853,247 3.22989 2,755,891 27.1% |30 1980 29.90 32,057,000 1,072,140 2.69253 2,886,773 8.2% |

A 30 1997 48.83 46,036,463 942,791 1.88273 1,775,022 13.4% |A 30 1998 87.20 87,200,436 1,000,005 1.86039 1,860,402 23.9% |A 30 1999 15.20 24,763,691 1,629,190 1.85743 3,026,102 4.2% |E 30 2013 20.00 71,930,178 3,596,509 1.11811 4,021,303 5.5% $2,393,476

36 1977 40.70 37,272,735 915,792 3.53856 3,240,581 57.4% |36 1978 30.20 25,422,700 841,811 3.22989 2,718,956 42.6% $3,018,394

TOTALS: 1,650.20 $1,469,459,165

1

2 Weighting component is Total Miles for each segment listed.

**Deleted as outlier**

Oil & Gas Journal data is provided as either estimated (or "current" per past OGJ nomenclature) or actual costs per FERC filings for the 12-month period ending June 30 of the year indicated for each segment in the database shown above. Most recent O&GJ report is from their Oct. 7, 2019 issue. Not all pipelines proposed (estimated) are built (actual). Some projects are proposed many years prior to being built, and some projects are built different from proposed in terms of mileage or diameter size; either or both of these conditions may warrant a project being listed more than once in the database shown above. Our intent is to list a single project only once.

NOTE: Segments denoted by bold font above have been added to this study for this tax year and/or have replaced estimated costs in previous studies with actual costs per updated FERC data. Selected segments have been designated as statistical outliers due to their stated cost, when trended to current, being multiples of apparent prevailing current cost per mile for the related diameter size; these outliers are subsequently disregarded in the calculation of weighted average RCN.

(E)stimated or (A)ctual. See footnote below.






Comparison Of RCN Per MileOffshore Pipelines(LTC Rules and Regulations Table 1307.B - bold font below)

"y"

TRENDED CURRENT YR CURRENT YR Previous Year O&GJ DATA CURVILINEAR PROPOSED 75% Curvilin. Change

DIAMETER LOUISIANA REGRESSION SCHEDULE Regression From "x" (INCHES) PIPELINES ANALYSIS RCN @ 75%* Analysis Prev Year

0.33 2 1,404,231 1,053,170 1,053,160 0.0%0.67 4 1,410,559 1,057,920 1,057,870 0.0%

1 6 1,763,138 1,418,257 1,063,690 1,063,580 0.0%2 8 1,527,159 1,442,490 1,081,870 1,081,410 0.0%3 10 2,374,050 1,472,182 1,104,140 1,103,110 0.1%4 12 1,898,782 1,514,758 1,136,070 1,134,240 0.2%5 14 1,566,721 1,562,595 1,171,950 1,169,080 0.2%6 16 1,795,045 1,623,090 1,217,320 1,213,200 0.3%7 18 1,535,204 1,696,245 1,272,180 1,266,580 0.4%8 20 1,930,643 1,782,059 1,336,540 1,329,230 0.5%9 22 1,880,532 1,410,400 1,401,140 0.7%10 24 1,876,144 1,991,664 1,493,750 1,482,320 0.8%11 26 2,115,455 1,586,590 1,572,760 0.9%12 28 2,251,905 1,688,930 1,672,470 1.0%13 30 2,393,476 2,401,014 1,800,760 1,781,450 1.1%14 32 2,562,782 1,922,090 1,899,690 1.2%15 34 2,737,209 2,052,910 2,027,200 1.3%16 36 3,018,394 2,924,294 2,193,220 2,163,970 1.4%17 38 3,124,039 2,343,030 2,310,010 1.4%18 40 3,319,761 2,489,820 2,452,990 1.5%19 42 3,525,891 2,644,420 2,603,590 1.6%20 44 3,742,240 2,806,680 2,761,680 1.6%21 46 3,968,617 2,976,460 2,927,100 1.7%22 48 4,204,833 3,153,620 3,099,720 1.7%

* Percentage reduction is for adjustment of schedule to reflect continental shelf pipelines only (i.e., eliminate deepwater costs).

Note: Not all diameters in this table have corresponding cost data from the Oil & Gas Journal for the history years analyzed. They are in this table mainly as "placeholders" so that the "x" scale on chart is spaced evenly for curve fitting purposes. Certain points have been disregarded for best curve fit.

Calculated using formula associated with curve fit on chart: y = 6329.5x2 - 9128.6x + 1450000







Summary Curve, Offshore Pipelines

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

$4,500,000

6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48

Repl

acem

ent C

ost N

ew($

per

mile

)

Diameter (inches)

Comparison Of RCN Per Mile LOUISIANA OFFSHORE PIPELINES

Oil & Gas Journal Regression Fit

75% of Fit Previous Year

Note: Data points shaded out (if any) have been deemed "outliers" and have been disregarded for curve fitting purposes.

CURRENT YEARy = 6329.5x2 - 9128.6x + 1450000

R2 = 0.9644







Summary Curve, All Pipelines

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

$8,000,000

$9,000,000

2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48

Repl

acem

ent C

ost N

ew

($ p

er m

ile)

Diameter (inches)

Louisiana Pipeline Cost ONSHORE VS. OFFSHORE

Onshore Offshore Onshore, Prev Yr Offshore, Prev Yr


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