Brock: It’s Time To End Break On Horizontal Wells
It’s time to end break on horizontal wells
BY JOHN A. BROCK
Oklahoma has been the best place to be in the oil and gas business for the past 50 years. We have the most enlightened regulators and legislators of any state.
During periods of low prices and technological change, the Oklahoma Corporation Commission has adjusted to new circumstances and economics. Commissioners have modified drilling and spacing units to acknowledge improved recoveries. They’ve promptly and fairly “adjudicated the equities” of forced poolings for drilling wells, thus making sure that mineral owners are treated fairly and operators aren’t delayed in drilling their wells. This has made it easier and less costly to develop fields so we could keep drilling wells and keep people employed when other states were suffering oil field “depressions.”
Oklahoma’s tax laws are fair and equitable. The normal wellhead taxes (gross production tax, ad valorem tax and excise taxes) are 7.1 percent. In Texas they’re 7.54 percent. In North Dakota they’re 11.5 percent. These are the states where most of the horizontal wells are being drilled. These taxes are a state’s share of the gross income from oil and gas production regardless of operating costs and drilling costs.