K.S.A. » Chapter 79
Kansas Statutes Annotated

K.S.A. § 79-331 (2026)

Same; determination of value; changes in determination of value of production; limitations on information used to establish fair market value

✓ current as of May 2026
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79-331. Same; determination of value; changes in determination of value of production; limitations on information used to establish fair market value. (a) Except as otherwise provided in subsection (b), in determining the value of oil and gas leases or properties the appraiser shall take into consideration the age of the wells, the quality of oil or gas being produced therefrom, the nearness of the wells to market, the cost of operation, the character, extent and permanency of the market, the probable life of the wells, the quantity of oil or gas produced from the lease or property, the number of wells being operated, and such other facts as may be known by the appraiser to affect the value of the lease or property.

Whenever a change in any of the factors or figures used in determining the 8/8ths valuation of the production for any oil or gas lease or property is made pursuant to the tax equalization, tax protest or tax grievance proceedings, such change shall apply to the working interest, royalty interest, overriding royalty interest and production payments and, if applicable, a refund of taxes shall be made in the manner prescribed by K.S.A. 79-2005(l)(1), and amendments thereto.

(b) The valuation of the working interest and royalty interest, except valuation of equipment, of any original base lease or property producing oil or gas for the first time in economic quantities on and after July 1 of the calendar year preceding the year in which such property is first assessed shall be determined for the year in which such property is first assessed by determining the quantity of oil or gas such property would have produced during the entire year preceding the year in which such property is first assessed upon the basis of the actual production in such year and by multiplying the income and expenses that would have been attributable to such property at such production level, excluding equipment valuation thereof, if it had actually produced said entire year preceding the year in which such property is first assessed by 60%.

(c) The provisions of subsection (b) shall not apply in the case of any production from any direct offset well or any subsequent well on the same lease.

(d) (1) In order to clarify and express the intent of the legislature regarding the methodology utilized in the determination of fair market value of producing oil and gas leases for property tax purposes, it is hereby declared that the primary and predominant consideration in such determination is, has been and shall be the actual value of oil and gas production severed from the earth.

(2) Information used to establish the fair market value of producing oil and gas leases which commence production during the preceding calendar year shall be limited to any information regarding production prior to April 1 of the calendar year in which such property is assessed. Information used to establish the fair market value of any base lease or property producing oil and gas for the first time in economic quantities on and after October 1 of the calendar year preceding the year in which such property is first assessed shall be limited to any information regarding production prior to July 1 of the calendar year in which such property is assessed.

(e) The provisions of this act shall apply to all tax years commencing on and after December 31, 2016.

History: L. 1917, ch. 323, § 3; R.S. 1923, 79-331; L. 1969, ch. 432, § 1; L. 1979, ch. 310, § 1; L. 2000, ch. 47, § 1; L. 2005, ch. 204, § 1; L. 2016, ch. 112, § 7; July 1.

Notes of Decisions
Cited in 11 cases (2 in the last 5 years), 1968–2022 · leading case: State Ex Rel. Stephan v. Martin, 641 P.2d 1011 (Kan. 1982).
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State Ex Rel. Stephan v. Martin, 641 P.2d 1011 (Kan. 1982). · cites it 16× “: This is an original action in quo warranto filed in this court on the petition of the Attorney General of Kansas, to oust the Director of Property Valuation from valuing and assessing oil and gas leases and properties in accordance with K.S.A. 1981 Supp. 79-331 as enacted by…”
In re Tax Appeal of River Rock Energy Co., 492 P.3d 1157 (Kan. 2021). · cites it 10× “2d 791 (1968) ("[T]he valuing of producing oil leases in compliance with K.S.A. 79-331, setting out eight factors, which must be considered as well as any other factors known by the assessor to affect the valuation of the property, is an extremely difficult operation.”
Cities Serv. Oil Co. v. Murphy, 447 P.2d 791 (Kan. 1968). · cites it 5× “74-2441; that the schedules prepared for assessing oil and gas leases for 1965 show on their face that all of the factors to be considered, as set forth in K.S.A. 79-331, are considered therein, and that plaintiffs' property was asseseed for the year 1965 in compliance with K.”
Bd. of Cnty. Commissioners v. Bankoff Oil Co., 960 P.2d 1279 (Kan. 1998). · cites it 3× “” K.S.A. 79-331 sets forth requirements for appraising the value of oil and gas leases.”
In Re the Equalization Appeals of EOG Resources, Inc., 265 P.3d 1207 (Kan. Ct. App. 2011). · cites it 8× “Not before the court in Helmerich, hpwever, was a situation where the initial production was achieved on or after July 1 of the year prior to assessment (thus invoking K.S.A. 2010 Supp. 79-331[b]), and where the only available data for all months prior to the appraisal date…”
In re Tax Appeal of River Rock Energy Co., 464 P.3d 344 (Kan. Ct. App. 2020). · cites it 8× “Statutorily, oil and gas wells and leases are appraised in accordance with K.S.A. 79-331(a) and K.S.A. 79-503a in order to reach the actual fair market value in the marketplace as opposed to a fictional, unrealistic, or arbitrary determination.”
Cimarex Energy Co. v. Seward Cnty. Bd. of Cnty. Commissioners, 164 P.3d 833 (Kan. Ct. App. 2007). · cites it 2× “” In determining valuation of oil and gas properties, a county appraiser must also consider the factors under K.S.A. 2006 Supp. 79-331(a). Helmerich & Payne, 34 Kan.”
Helmerich & Payne, Inc. v. Bd. of Seward Cnty. Commissioners, 115 P.3d 149 (Kan. Ct. App. 2005). · cites it 3× “rovided in subsection (b) of this section, in determining the value of oil and gas leases or properties the appraiser shall take into consideration tire age of the wells, the quality of oil or gas being produced therefrom, the nearness of the wells to market, the cost of…”
Bd. of Cnty. Commissioners v. Bankoff Oil Co., 949 P.2d 628 (Kan. Ct. App. 1997). · cites it 4× “The objective of both K.S.A. 79-331 and K.S.A. 1996 Supp. 79-503a is to determine the actual fair market value of the property appraised.”
Colorado Interstate Gas Co. v. Fed. Energy Regulatory Comm'n, 850 F.2d 769 (D.C. Cir. 1988). “Kan. StatAnn. § 79-331(b). Notice it is in fact annualized production that is used; the tax on a property starting to produce December 1 will be far more than one-twelfth that of an equally productive property starting to produce January 1.”
All. Well Serv., Inc. v. Pratt Cnty., Kansas (Kan. Ct. App. 2022). “" K.S.A. 79-331(d)(1). Again, "[t]he rational basis standard is a very lenient standard.”
— K.S.A. § 79-331(a) — 6 cases
In re Tax Appeal of River Rock Energy Co., 492 P.3d 1157 (Kan. 2021). “2d 791 (1968) ("[T]he valuing of producing oil leases in compliance with K.S.A. 79-331, setting out eight factors, which must be considered as well as any other factors known by the assessor to affect the valuation of the property, is an extremely difficult operation.”
In re Tax Appeal of River Rock Energy Co., 464 P.3d 344 (Kan. Ct. App. 2020). “Statutorily, oil and gas wells and leases are appraised in accordance with K.S.A. 79-331(a) and K.S.A. 79-503a in order to reach the actual fair market value in the marketplace as opposed to a fictional, unrealistic, or arbitrary determination.”
Cimarex Energy Co. v. Seward Cnty. Bd. of Cnty. Commissioners, 164 P.3d 833 (Kan. Ct. App. 2007). “” In determining valuation of oil and gas properties, a county appraiser must also consider the factors under K.S.A. 2006 Supp. 79-331(a). Helmerich & Payne, 34 Kan.”
In Re the Equalization Appeals of EOG Resources, Inc., 265 P.3d 1207 (Kan. Ct. App. 2011). “Not before the court in Helmerich, hpwever, was a situation where the initial production was achieved on or after July 1 of the year prior to assessment (thus invoking K.S.A. 2010 Supp. 79-331[b]), and where the only available data for all months prior to the appraisal date…”
Bd. of Cnty. Commissioners v. Bankoff Oil Co., 949 P.2d 628 (Kan. Ct. App. 1997). “The objective of both K.S.A. 79-331 and K.S.A. 1996 Supp. 79-503a is to determine the actual fair market value of the property appraised.”
— K.S.A. § 79-331(b) — 5 cases
State Ex Rel. Stephan v. Martin, 641 P.2d 1011 (Kan. 1982). “: This is an original action in quo warranto filed in this court on the petition of the Attorney General of Kansas, to oust the Director of Property Valuation from valuing and assessing oil and gas leases and properties in accordance with K.S.A. 1981 Supp. 79-331 as enacted by…”
In Re the Equalization Appeals of EOG Resources, Inc., 265 P.3d 1207 (Kan. Ct. App. 2011). “Not before the court in Helmerich, hpwever, was a situation where the initial production was achieved on or after July 1 of the year prior to assessment (thus invoking K.S.A. 2010 Supp. 79-331[b]), and where the only available data for all months prior to the appraisal date…”
Bd. of Cnty. Commissioners v. Bankoff Oil Co., 960 P.2d 1279 (Kan. 1998). “” K.S.A. 79-331 sets forth requirements for appraising the value of oil and gas leases.”
Helmerich & Payne, Inc. v. Bd. of Seward Cnty. Commissioners, 115 P.3d 149 (Kan. Ct. App. 2005). “rovided in subsection (b) of this section, in determining the value of oil and gas leases or properties the appraiser shall take into consideration tire age of the wells, the quality of oil or gas being produced therefrom, the nearness of the wells to market, the cost of…”
Colorado Interstate Gas Co. v. Fed. Energy Regulatory Comm'n, 850 F.2d 769 (D.C. Cir. 1988). “Kan. StatAnn. § 79-331(b). Notice it is in fact annualized production that is used; the tax on a property starting to produce December 1 will be far more than one-twelfth that of an equally productive property starting to produce January 1.”
— K.S.A. § 79-331(d) — 1 case
In re Tax Appeal of River Rock Energy Co., 492 P.3d 1157 (Kan. 2021). “2d 791 (1968) ("[T]he valuing of producing oil leases in compliance with K.S.A. 79-331, setting out eight factors, which must be considered as well as any other factors known by the assessor to affect the valuation of the property, is an extremely difficult operation.”
— K.S.A. § 79-331(d)(1) — 1 case
All. Well Serv., Inc. v. Pratt Cnty., Kansas (Kan. Ct. App. 2022). “" K.S.A. 79-331(d)(1). Again, "[t]he rational basis standard is a very lenient standard.”
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