The daily Journal of Rep. Jon Echols is getting a lot of reading by Oklahomans. It’s also getting a lot of diverse comments.
One noteworthy reaction in Rep. Jon Echol’s latest post comes from the longtime Ada, OK financier and oil production expert, Mike Cantrell. It’s priceless and blunt. We’re posting it for your review.
The Double Chumping of Oklahoma
Big oil companies CEOs fly in their corporate jets and their $5000 Armani suits and hold press conference after press conference boasting about getting 2000-6000 barrel per day wells. They talk about how the Stack and the Scoop are the best plays in America with the lowest break even cost ($24.40 per barrel) and some of the best production rates.
Then they sell the Oklahoma legislature that they’re going to invest billions in taking more of a vital but finite Oklahoma resource at low oil prices; but only if they get to keep a 2% tax rate.
The cruelest and most cynical of all hypocrisies is to brag about how good our resources are but then to scare Oklahoma citizens by threatening that unless they get to pay a 2% tax rate They will take their rigs and go home! We are waiting to see them tell the North Dakota and Texas legislatures that unless they lower their rates from 10% and 8.5% respectively to 2 %, that they will take their rigs away. Honestly, that would generate a good laugh in those states.
We should call their bluff. There are companies trying every day to get in on our oil plays.
Now mind you, every stripper well in the state pays 7%.and the best rate for new wells anywhere else they drill is 8.3% (10% in North Dakota)!
It’s like we should all bow down and worship them for taking our resources on the cheap while our schools are bleeding teachers and our infrastructure crumbles.
WC Fields said, ” if you look around the room and can’t spot the chump, it’s you!” The Oklahoma legislature is looking for the chump on a daily basis.
Perhaps it’s them!
We don’t even know if these companies are taking the 5% subsidy and funding their drilling in states where they pay a higher rate than they would here if the tax was restored to 7%.
By the way, to add insult to the injury, they are destroying hundreds of existing vertical wells that were paying 7% with their massive frack jobs! (451 in Kingfisher county alone)
Is there such a thing as being “double chumped”?
Cantrell added more thoughts, at his own social media page…
Cantrell Calls On Oklahomans To Light Up The Switchboard At the Capitol
It is embarrassing how my industry is putting to my state. Everyday there are stories in the business press about how the Stack and Scoop plays are the best in the country with the lowest breakeven cost per barrel.($24.40 today). They would drill those wells at a 10 % tax rate. It is outrageous that we are incentivizing the taking of our finite, gone forever, oil and gas resources with a 2% tax rate at low prices when the normal 7% rate is lower than any other state.
What is even crazier is that we are subsidizing the drilling in other states with our tax revenue!
Oh well, at least their children are getting good educations!
Money truly is the mothers milk of politics in Oklahoma and our legislature is drunk on it! The cruelest hypocrisy of all is these mostly out of state owned companies scaring their employees in to thinking that if they lose their sweetheart 2% rate it will cost them their jobs, when no where else they drill has a rate even better than 7%. The only thing that can trump money in the political process is constituency . If we all call our legislators and let them know we see what they are doing it would make a difference.