The Double “Chumping” of Oklahoma

Big oil companies CEOs fly into OKC 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 breakeven 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% respectfully, 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 feverishly 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.

The Oklahoma Energy Producers Alliance, made up of small oil and gas producers living all across Oklahoma, has commissioned a poll that shows that 67% of all likely voters (and 57% of Republican voters) want the 2% raised to 7%.

Our legislative leadership will likely listen to the Daily Oklahoman when they try to compare this poll result to a similar poll result on the sales tax initiative. Thats like saying the Dallas Cowboys have no greater chance of winning the Super Bowl than the Ada Cougars just because they both play football! The sales tax increase would have hit everyone. Restoring the 2% tax to 7% only cost the companies making out like bandits, who have no way to pass the cost on to the voters. This should be a no-brainer!

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 chump-ed”?

Mike Cantrell

Co- Chairman of the Oklahoma Energy Producers Alliance