Rebates in Texas would not apply to the wells like they are drilling in Oklahoma
Let us introduce you to Donelle Harder. She is the VP of the Big oil association in Oklahoma.
Below you’ll find her comments to a guest post (link) from a former industry insider who advocated for 7% GPT across the board and our response. Please reprimand us if we ever try to pull the wool over the public eyes like this.
They know that the rebates in Texas have no effect on the wells like they are drilling here.
The same similar rebates which we gave up voluntarily in Oklahoma last year also didn’t apply to their new horizontal wells; just to ours!
It’s time they put their skin in the game and agree to a 7% tax rate, which is still lower than the effective rate anywhere else they drill; and pay our teachers.
Donelle Harder:
In the meantime, here are all the different rates and incentives Texas offers for the gross production tax rate, so that people can look into it themselves. Oklahoma has ended all 11 gross product tax rebates over the past three years. As of July 2017, there are ZERO rebates to GPT in Oklahoma, unlike the several offered by Texas that drive down the overall rate of 7.5% to 3.7%. https://comptroller.texas.gov/taxes/natural-gas
Donelle, in full disclosure, folks should know you are the VP of the big oil lobby in Oklahoma.
Your response cannot have been sent from a position of a lack of knowledge. So it’s purpose must have been to mislead and confuse.
Yes, there are rebates in Texas. But none of them would apply to the wells drilled in Texas like are getting the 2% rate in Oklahoma. The rebate on gas is only on pure gas wells – those not coming off oil wells- and only then if the well makes less than 90mcf per day.
Virtually none of the horizontals being drilled in Oklahoma meet this criteria as they are either oil wells producing casing head gas or high condensate wells. And they make more than 90 mcf per day for the 3 years they get the 2% rate. On oil, the Texas rebate is virtually irrelevant. It only applies to wells making less than 15 barrels per day and then only if oil is less than $30 per day for three consecutive months. This entire argument is bogus!
But you know that! You just think Oklahomans are too uneducated to figure it out; which they will soon be if we continue to bleed teachers and fall even further behind in the education of our children.
We are on opposite sides of this issue but it is painful to watch an important segment of our industry using messages that are blatantly wrong hoping no one notices.
We want you to be better than that.
