BQC Inc LLC

Consulting and oilfield services.

BQC Incorporated is a pioneering firm that seamlessly merges creativity and functionality to redefine engineering ex.cellence. Texas offers numerous sales tax exemptions to the energy industry. These exemptions apply to a wide array of operational purchases, such as downhole services, production equipment, roustabout services, chemicals and utilities. A variety of operational exemptions are available to West Texas energy companies within the upstream sector. Charging for oilfield consulting services in Texas involves setting your professional fees based on your expertise and the market and understanding how to apply taxes.

1. Determine Your Consulting Rate

  • Hourly Rate: Most consultants charge an hourly rate, which varies based on your experience, specialization, and the complexity of the project. In Texas, oilfield consultants typically charge between $100 and $300 per hour, though highly specialized consultants may charge more.
  • Daily Rate: For longer projects, many consultants offer a daily rate. This is often 8-10 times the hourly rate.
  • Project-Based Fees: You may choose to charge a flat fee for a specific project, which could be based on the estimated number of hours or the overall scope.

2. Consider Your Expenses

  • Travel and Lodging: If you’re required to travel to oilfields, include travel expenses (mileage, airfare, lodging, meals, etc.) either as a fixed amount in your quote or billed separately. You can charge the actual cost or include a per diem.
  • Equipment/Materials: If you provide specific tools, reports, or technology as part of the consulting services, factor in those costs.
  • Overhead Costs: Consider administrative costs, insurance, and other business overheads when calculating your fees.

3. Add a Profit Margin

  • In addition to covering direct costs, apply a profit margin. This can range from 10% to 25% depending on the nature of your services and the value you’re bringing to the client.

4. Sales Tax in Texas for Consulting Services

  • No Sales Tax on Consulting Services: In Texas, consulting services are generally not subject to sales tax. Consulting is considered a professional service, and Texas does not impose sales tax on labor involved in consulting or advisory services.
  • Exemptions for Certain Tangible Deliverables: If you are providing any tangible goods (such as physical reports, equipment, or software), these could be subject to sales tax, but the labor portion of consulting would not be taxed.
  • Mixed Services: If your consulting services also include tangible goods or taxable services (e.g., equipment rental or maintenance), you may need to separately itemize the taxable and non-taxable portions on your invoice.

5. Invoice Structure

A clear and detailed invoice will help clients understand the costs and ensure transparency. Your invoice should include:

  • A description of the consulting services (hourly rate, daily rate, or project fee)
  • Any reimbursable expenses (travel, lodging, etc.)
  • Total amount due before taxes
  • Any sales tax (if applicable for tangible goods or mixed services)
  • Payment terms (due date, late fees if applicable)

6. Consult with a Tax Professional

Given the complexity of tax regulations, particularly with mixed services or deliverables, consult with a Texas tax professional or accountant to ensure you’re charging correctly.

About us

Roustabout Services

Roustabout services in Texas are too numerous to discuss in detail, but common non-taxable services performed by these companies include building a location, cleaning up oil spills, repair and maintenance on exempt production equipment and digging pits.

In Texas, if you’re providing roustabout services for oilfields, pricing involves a few key considerations, including the labor rate, equipment usage, and applicable taxes.

1. Determine Your Labor Rate

  • Hourly Rate: Roustabout services are often billed by the hour. The rate can vary based on experience, demand, and the complexity of the work. Typical hourly rates for roustabout labor can range from $20 to $50 per hour or more, depending on the region and the scope of the work.
  • Daily or Weekly Rate: Some contractors charge a flat daily or weekly rate, especially if working on longer projects.

2. Add Equipment Costs

  • If your services involve the use of special equipment (like heavy machinery, trucks, or tools), you may charge an additional fee for equipment usage. This could be either:
    • Rental Fees: If you provide the equipment.
    • Cost Reimbursement: If you rent from another supplier.
  • You can itemize this separately or include it in your overall rate.

3. Factor in Any Other Overheads

  • Fuel Surcharges: Given the fluctuation in fuel prices, you might add a surcharge to cover transportation or machinery fuel costs.
  • Insurance and Liability Costs: If you need to carry extra insurance, these costs should be factored in.
  • Administrative Fees: Some contractors include small percentages to cover administrative or operational overhead.

4. Add Profit Margin

  • After calculating the direct costs (labor, equipment, overheads), add a reasonable profit margin, typically ranging from 10% to 20%.

5. Taxes in Texas

  • Sales Tax: Texas does not generally impose sales tax on labor services, especially those related to construction or improvement of real property, which would include many oilfield services. However, you may need to charge sales tax if you are providing tangible personal property (such as renting out equipment or selling materials).
  • Exemptions: Texas has some exemptions for services provided to oil and gas companies, so check whether your services qualify for any tax exemptions.
  • Consult a Tax Professional: Always consult a Texas tax professional or accountant to ensure you’re complying with local tax laws, as rules can vary based on the specifics of your work.

6. Invoice Structure

A professional invoice for roustabout services should include:

Any applicable taxes (with clear tax exemption notes, if applicable)

Breakdown of labor (hourly rate, number of hours worked)

Equipment fees (if applicable)

Other surcharges (fuel, admin, etc.)

Total before taxes

MSA (Master Service Agreement)

re.

IT (Information Technology)

Low/Medium voltage electrical

Recompletions

Downhole services in Texas that start or stimulate production are exempt from sales tax. Qualifying services include completions, frac jobs and recompletions. Not only are these specific services not subject to tax, but all downhole services performed as part of a project designed to start or stimulate production are also entitled to the exemption. For example, pulling tubing (which is normally taxable) becomes a non-taxable service if performed as part of a recompletion.

Production Enhancement

Production equipment that causes a chemical or physical change to the product qualifies as non-taxable. Equipment such as separators, heater treaters and dehydrators, which are used to refine the oil and gas stream, are not subject to tax. Further, normally taxable repair parts and repair labor for such equipment are also exempt.

MSA (Master Service Agreement)

MASTER SERVICE AGREEMENT
This Master Service Agreement (“Agreement”) is entered into as of this ____ day of __, 20, by and between:

  • Customer Name: ________________________
    Address: ________________________
    (Hereinafter referred to as “Customer”)
  • Consultant Name: ________________________
    Address: ________________________
    (Hereinafter referred to as “Consultant”)

Recitals

  1. Purpose:
    The Customer desires to retain Consultant to provide petroleum engineering consulting services, and the Consultant agrees to provide such services on the terms and conditions set forth in this Agreement.
  2. Governing Law:
    This Agreement will be governed by the laws of the state of Texas, without regard to its conflict of law principles.

Agreement

1. Scope of Services

a. Consultant Services: The Consultant agrees to provide the following petroleum engineering consulting services to the Customer:

(Specify the petroleum engineering services, e.g., reservoir evaluation, well design, drilling operations, or roustabout services.)

b. Statement of Work (SOW): Specific details regarding each task or project, including deliverables, deadlines, and fees, shall be outlined in separate Statements of Work (SOW), each of which will be incorporated into this Agreement by reference.

2. Compensation and Payment Terms

a. Consulting Fees: The Customer agrees to compensate Consultant at the rate of $______ per (hour/day/week) for services rendered. Alternatively, fees may be set on a per-project basis as outlined in each SOW.

b. Invoicing and Payment: Consultant will invoice the Customer on a (weekly/monthly/other) basis. All invoices are due and payable within ____ days of receipt. Late payments may incur a fee of ____% per month.

c. Reimbursable Expenses: The Customer agrees to reimburse Consultant for any pre-approved expenses incurred while performing services, including travel, lodging, and other business-related expenses.

3. Confidentiality and Intellectual Property

a. Confidential Information: Consultant acknowledges that during the course of providing services, they may have access to proprietary information, including but not limited to Customer’s business strategies, client lists, technical information, and financial information (“Confidential Information”). Consultant agrees to not disclose or use any Confidential Information for any purpose other than providing services under this Agreement, without prior written consent.

b. Intellectual Property Ownership: Any inventions, designs, reports, data, or work products created by the Consultant during the performance of services under this Agreement shall be the exclusive property of the Customer. The Consultant hereby assigns all rights to such intellectual property to the Customer.

4. Independent Contractor Relationship

a. Status: Consultant is an independent contractor and not an employee, agent, or partner of the Customer. Consultant is responsible for all taxes, insurance, and other legal obligations related to compensation received under this Agreement, including income tax and self-employment tax as required by Texas law.

b. No Employee Benefits: The Consultant shall not be entitled to any Customer-provided benefits, including health insurance, paid leave, or retirement plans.

5. Term and Termination

a. Term: This Agreement shall commence on the Effective Date and continue until terminated as provided herein.

b. Termination for Convenience: Either Party may terminate this Agreement for any reason upon ____ days’ written notice to the other Party.

c. Termination for Cause: Either Party may terminate this Agreement immediately if the other Party commits a material breach and fails to remedy it within ____ days after receiving written notice of the breach.

d. Effect of Termination: Upon termination, Consultant shall cease all services and deliver any work product completed up to the date of termination. The Customer shall pay Consultant for services rendered up to the termination date.

6. Indemnification

a. Consultant Indemnification: The Consultant agrees to indemnify and hold harmless the Customer, its officers, employees, and agents from any claims, damages, losses, or expenses (including reasonable attorneys’ fees) arising from Consultant’s negligent acts or omissions, or breach of this Agreement.

b. Customer Indemnification: The Customer agrees to indemnify and hold harmless the Consultant from any claims, damages, losses, or expenses arising from the Customer’s negligence or misconduct, or from the Customer’s breach of this Agreement.

7. Limitation of Liability

a. Limitation: In no event shall either Party be liable for any indirect, incidental, consequential, or special damages, including loss of profits or revenue, even if such damages were foreseeable or advised of the possibility thereof.

8. Insurance

a. Consultant agrees to maintain the following minimum insurance coverage during the term of this Agreement:
– General Liability Insurance: Minimum coverage of $.
– Professional Liability Insurance (Errors & Omissions): Minimum coverage of $.
– Workers’ Compensation Insurance: As required by Texas law (if applicable).

9. Compliance with Texas Law

a. Consultant agrees to comply with all applicable local, state, and federal laws, including obtaining any necessary licenses or permits required to perform services in Texas.

10. Dispute Resolution

a. Negotiation: In the event of a dispute arising out of or related to this Agreement, the Parties agree to first attempt in good faith to resolve the dispute through negotiations.

b. Arbitration: If the dispute cannot be resolved through negotiation, it shall be settled by binding arbitration in accordance with the rules of the American Arbitration Association. Arbitration shall take place in Texas, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction.

11. Force Majeure

a. Neither Party shall be liable for failure to perform its obligations under this Agreement if such failure is due to causes beyond the reasonable control of the affected Party, including acts of God, war, terrorism, or natural disasters.

12. Miscellaneous Provisions

a. Entire Agreement: This Agreement, together with any SOWs, constitutes the entire agreement between the Parties, and supersedes all prior discussions, agreements, or understandings.

b. Amendments: Any amendment to this Agreement must be in writing and signed by both Parties.

c. Assignment: Neither Party may assign its rights or delegate its obligations under this Agreement without the prior written consent of the other Party.

d. Severability: If any provision of this Agreement is found to be unenforceable, the remainder of the Agreement shall remain in full force and effect.

e. Notices: All notices required under this Agreement shall be in writing and sent to the addresses listed above, either by certified mail or email (with confirmation of receipt).

IN WITNESS WHEREOF, the Parties have executed this Master Service Agreement as of the Effective Date.

Consultant
Signature: ________________________
Name: ____________________________
Date: _____________________________

Customer
Signature: ________________________
Name: ____________________________
Title: ____________________________
Date: _____________________________

Notes:

  • Compliance: The MSA addresses Texas-specific laws, including the need for proper tax handling, workers’ compensation, and business permits/licenses.
  • Dispute Resolution: Texas law typically requires disputes to be resolved through arbitration, which is reflected here.
  • Insurance Requirements: Make sure the amounts specified under the insurance clauses are appropriate for the scope of work and industry risks.