Oklahoma Senate Passes Tax Hike on Oil and Gas

[CHenry]

Oh, they will not stop drilling in general. They will go to a different state to drill and the tax revenue that was being collected in Oklahoma will go with them. If it becomes uneconomical to drill in Oklahoma, they will move.

It's a little different than your example because the oil and gas is everywhere, not just Oklahoma. These drillers are not held captive to Oklahoma like gold veins that run through the mountains of Colorado.

You should look at the active and new well reports over the last 4 years. LOTs of oil has been found in OK as of recent. They aint leaving over a 2% tax increase.

 

[Free Trapper]

You should look at the active and new well reports over the last 4 years. LOTs of oil has been found in OK as of recent. They aint leaving over a 2% tax increase.

We also have HUGE amounts of gas....Not including what you find on the OSA forums

 

[SlugSlinger]

You should look at the active and new well reports over the last 4 years. LOTs of oil has been found in OK as of recent. They aint leaving over a 2% tax increase.

Where is that report?

 

[Shadowrider]

I would agree that an audit needs to take place and those responsible for mismanaging our tax dollars should be held accountable. That being said, I would also argue that if drillers are running their operating expenses within 2% of their revenue stream ("This is not a threat, but reality because if these taxes are increased, these companies will be below break-even and would lose money with every new well.") they are already under water and it's not a business model tat ANY company would support.

So all in all...Everyone is lying and we are paying the price for it.

O&G companies have historically averaged around a 10% profit margin at the bottom line. Yes that's an AVERAGE and there are deviations but it's an across the board number for the industry. Sure they report $10,000,000,000 income and that's what everyone fixates on, they choose to ignore the $9,000,000,000 that they spent on operating costs. OBTW that $9,000,000,000 goes right into the economy in salaries, supplies, equipment, etc. You take 2% out of their profit, that's a 20% hit to their bottom line. Nobody can argue otherwise, they'll just have to lie which is exactly what they do.

This whole fiasco could have been alleviated if they'd just yank the tax breaks to wind energy. A billion that has cost us and they ***** and moan about 200 million in shortfall. Screw them, shut the government down for all I care, I can't deal with stupidity of that magnitude, let Darwin do what he does. O&G actually makes a profit and contributes to the economy. Wind can't hold their head above water without our tax dollars subsidizing them, create almost no jobs, etc., it all rolls down hill from there and it is a drain on everyone's pocketbook in higher electricity costs. If they tell you otherwise they are lying. Let them build some gas fired plants, it's cheaper in the long run and dare I say, it's cleaner too.

 

[SlugSlinger]

What companies are you talking about? Look at CHK or WPX, neither are making a profit at this point and these are the types of companies that would be paying the tax.

 

[Shadowrider]

You should look at the active and new well reports over the last 4 years. LOTs of oil has been found in OK as of recent. They aint leaving over a 2% tax increase.

I look at it everyday. My bosses are concerned. There's a hell of a lot more involved than saying it's just 2%. Bottom line is they'll fly the middle finger move to ND and TX.

 

[CHenry]

I look at it everyday. My bosses are concerned. There's a hell of a lot more involve than saying it's just 2%. Bottom line is they'll fly the middle finger move to ND and TX.

ND just raised oil taxes to 6%. TX is 4.6%. They arent going to flee to ND or TX because we rise to 4%. The quality of ND oil is rough and the working conditions....well. lol, OK is looking better all the time!

 

[Shadowrider]

ND just raised oil taxes to 6%. TX is 4.6%. They arent going to flee to ND or TX because we rise to 4%. The quality of ND oil is rough and the working conditions....well. lol, OK is looking better all the time!

Like I said, it's more involved than that. Decline rates, ROI, well life projections, etc. FYI, we contract directly with those that will be paying that 2% increase. So there's that...

Edit: Also, TX and ND have a crap ton of DUC wells (Drilled but not completed).

 

[CHenry]

Like I said, it's more involved than that. Decline rates, ROI, well life projections, etc. FYI, we contract directly with those that will be paying that 2% increase. So there's that...

And you certainly are more well versed in all this than me but I look at the trends over the years and it just doesnt support what others are saying about the negatives in raising to 4%.
Lest I'm missing something.

 

[SlugSlinger]

Oklahoma rig count falls to seven-month low

http://journalrecord.com/2017/11/03/oklahoma-rig-count-falls-to-seven-month-low/

US rig count down by 11 this week to 898; Oklahoma loses 8
The number of rigs exploring for oil and natural gas in the U.S. declined by 11 this week to 898.

That's up from the 569 rigs that were active a year ago.

Houston oilfield services company Baker Hughes said Friday that 729 rigs sought oil and 169 explored for natural gas this week.

Among major oil- and gas-producing states, Colorado added four rigs, Texas gained three, while Alaska tacked on two.

Oklahoma lost eight rigs and Louisiana shed four. New Mexico and North Dakota both lost a pair, while Utah dropped one.

Arkansas, California, Ohio, Pennsylvania, West Virginia and Wyoming were unchanged.

The U.S. rig count peaked at 4,530 in 1981. It bottomed out in May of 2016 at 404.


http://abcnews.go.com/Business/wireStory/us-rig-count-11-week-898-oklahoma-loses-50920869