Certainty in the oil and gas industry will result in continued capital investment, royalty payments
Oklahoma City (May 22, 2014) – The State Chamber of Oklahoma applauds today’s passage of House Bill 2562 which sets a permanent gross production tax rate for all new wells. The rate will be two-percent for the first three years of operation and seven-percent after that.
“This compromise language provides certainty for one of the key industries in Oklahoma,” said State Chamber President and CEO Fred Morgan. “It ensures that companies making their drilling plans this summer won’t have to assume a sevenfold increase in taxes and provides fairness by treating all wells the same.”
Without action this year, companies would have to assume that the tax rate on horizontal wells would increase from one-percent to seven-percent in July, 2015. That could have led to drilling operations being moved to more cost-competitive states, taking jobs, capital investment and royalty payments with them.
“We are happy lawmakers acted to ensure continued growth throughout Oklahoma’s economy,” said Morgan. “We’d like to thank Lieutenant Governor Todd Lamb, Speaker Jeff Hickman, President Pro Tem Brian Bingman and Senator Rob Johnson for carrying this bill through the legislative process.”