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Oklahoma poised to become top oil producer, Continental Resources CEO Harold Hamm says
newsok ^ | June 5, 2014 | Jay F. Marks

Posted on 06/15/2014 9:04:06 PM PDT by ckilmer

Oklahoma poised to become top oil producer, Continental Resources CEO Harold Hamm says

Surging crude production in Oklahoma has the state on the verge of becoming the nation’s third-largest source of oil, according to officials at Continental Resources Inc.
by Jay F. Marks Modified: June 6, 2014 at 10:00 pm •  Published: June 5, 2014
 

Oklahoma is poised to cash in from the ongoing U.S. oil boom, according to one of the nation’s foremost experts on the topic.

Continental Resources Inc. CEO Harold Hamm said tax incentives meant to encourage horizontal drilling have done their job, as Oklahoma’s oil production is steadily increasing.

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Oklahoma produced 388,000 barrels of oil a day in March, marking its highest output in 25 years, according to the U.S. Energy Information Administration

That is up 17 percent over March of last year, 49 percent over March 2012 and 80 percent over March 2010.

“That’s the whole horizontal drilling story right there,” said Warren Henry, Continental’s vice president of research and policy.

Hamm said it took some time for drillers to learn the best techniques for horizontal drilling in Oklahoma, but they now are applying those methods in more than a dozen different resources plays around the state. He estimated that many more remain to be explored.

He said he is pleased state lawmakers adopted a gross production tax proposal little changed from the plan put forth by Hamm and two other Oklahoma City energy leaders, Devon Energy Corp. Executive Chairman Larry Nichols and Chesapeake Energy Corp. CEO Doug Lawler.

They suggested a 2 percent tax on the first 48 months of production from all wells drilled in Oklahoma, while opponents wanted a return to 7 percent. The Legislature approved and Gov. Mary Fallin last week signed into law a rate of 2 percent for the first 36 months of production. It will go into effect next summer, replacing an expiring incentive program.

The state historically has assessed a 7 percent gross production tax, but lawmakers created an incentive for horizontal drilling in 1994. The incentive initially lowered the tax rate to 1 percent for the first two years or until costs were recovered. It was extended to up to four years in 2002.

“It worked out like everybody hoped,” Hamm said. “We’re drilling very expensive wells, but overall we’re seeing a nice increase in production for Oklahoma.”

He said the new tax program will not hinder Oklahoma’s participation in the nation’s ongoing “oil and gas renaissance.”

Oklahoma currently is the nation’s No. 5 oil producer, according to Energy Information Administration numbers, but Continental officials predict the state could leapfrog California and Alaska in the next year of so. That would leave it behind only oil titans Texas and North Dakota.

“We’re so lucky that Oklahoma is an oil and gas state,” Hamm said, a day after state officials announced tax collections on oil and natural gas production in May rose almost 28 percent over last year.

He said producers are finding oil in plays that are spread across Oklahoma.

“It’s not just one play like the Bakken (Shale in North Dakota),” Hamm said.

Oklahoma is nearing production of 400,000 barrels of oil a day, a threshhold not seen since June 1986.


TOPICS: Business/Economy; US: Oklahoma
KEYWORDS: energy; oil; oklahoma; woodford

1 posted on 06/15/2014 9:04:07 PM PDT by ckilmer
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To: ckilmer

Lets hope Senator Shannon can keep the EPA off their backs :D


2 posted on 06/15/2014 9:06:15 PM PDT by Viennacon
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To: thackney; bestintxas; Kennard; nuke rocketeer; crusty old prospector; SunkenCiv

Hamm thinks Okalahoma oil production could pass California and Alaska later next year.


3 posted on 06/15/2014 9:07:06 PM PDT by ckilmer (q)
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To: thackney; bestintxas; Kennard; nuke rocketeer; crusty old prospector; SunkenCiv

Oklahoma is producing over 300k oil while Alaska and California are producing over 500k oil.

Looks like Oklahoma production is accelerating.


4 posted on 06/15/2014 9:13:31 PM PDT by ckilmer (q)
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To: ckilmer

Obama is tearing his Gold Medal Flour grey hair out hearing about the coming oil boom. His fear is that he will run out of time to ruin this nation by 2017.


5 posted on 06/15/2014 9:20:36 PM PDT by lee martell
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To: ckilmer

Oklahoma is OK :-)


6 posted on 06/15/2014 9:40:43 PM PDT by Bobalu (What cannot be programmed cannot be physics)
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To: ckilmer
But all the libweenies scoffed at the notion that we could produce more oil. They said it was a finite source of energy and we needed to find alternative energy sources pronto. Peak oil they shrieked!
7 posted on 06/15/2014 9:52:02 PM PDT by princeofdarkness (The GOP is the present version of 1940 France and it will only get worse.)
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To: ckilmer

“Oklahoma poised to become top oil producer, Continental Resources CEO Harold Hamm says”

I didn’t see anything in the article that said that. Maybe leapfrogging to number three, but not “top oil producer”


8 posted on 06/15/2014 9:55:08 PM PDT by Figment
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To: ckilmer

Well, I’m glad to be an Okie ... :-) ...


9 posted on 06/15/2014 10:04:39 PM PDT by Star Traveler (Remember to keep the Messiah of Israel in the One-World Government that we look forward to coming)
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To: ckilmer

It would be nice if all this new oil production would translate into low gas prices, here in AMERICA.


10 posted on 06/15/2014 11:15:45 PM PDT by PoloSec ( Believe the Gospel: how that Christ died for our sins, was buried and rose again)
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To: ckilmer; All

Putin look out, we don’t need your oil.


11 posted on 06/15/2014 11:24:15 PM PDT by gleeaikin
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To: All

Well, with California and Alaska oil output in sharp decline, the bar is easier to get over.

More important, why do this? Why not run up import totals to the stratosphere and save domestic reserves for a time after we burn up everyone else’s?


12 posted on 06/15/2014 11:25:08 PM PDT by Owen
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To: gleeaikin

Oddly, I think the last numbers are something like 7 million bpd imported — and 400K of that is indeed Russian.


13 posted on 06/15/2014 11:26:48 PM PDT by Owen
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To: Owen

Oklahoma is only poised, it hasn’t gotten there yet Putin!


14 posted on 06/15/2014 11:54:11 PM PDT by gleeaikin
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To: Viennacon

Nice work - good to see ADULTS run some of our states.


15 posted on 06/16/2014 3:02:50 AM PDT by BobL
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To: ckilmer

California shall soon fall into the dustbin of Socialist history.


16 posted on 06/16/2014 4:16:18 AM PDT by norwaypinesavage (The Stone Age didn’t end because we ran out of stones)
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To: Figment

I assumed the article “a” in front of “top oil” rather than “the”. It made sense that way.

Headlines are often misleading. They don’t really convey information, just an attempt to grap the reader and drag them in.


17 posted on 06/16/2014 4:35:31 AM PDT by thackney (life is fragile, handle with prayer)
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To: Owen
with California and Alaska oil output in sharp decline

California has already seen a slight increase in their oil production rate. They are not longer declining.

And I would hardly call Alaska's a sharp decline. The past 12 months are less than 1% down from the previous 12 months. Image and video hosting by TinyPic

Image and video hosting by TinyPic

18 posted on 06/16/2014 4:44:05 AM PDT by thackney (life is fragile, handle with prayer)
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To: ckilmer

Without any major contribution from the Monterey, I think Oklahoma will pass California in a couple years. Probably Alaska as well without any significant drilling up there.


19 posted on 06/16/2014 6:12:05 AM PDT by crusty old prospector
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To: crusty old prospector

Without any major contribution from the Monterey, I think Oklahoma will pass California in a couple years. Probably Alaska as well without any significant drilling up there.
............
The interesting thing is how fast its happening. Looks like Oklahoma oil production will go up this year and next by nearly 100k barrels@ day.


20 posted on 06/16/2014 10:51:08 AM PDT by ckilmer (q)
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To: thackney

How’s it look in the past 20 years.


21 posted on 06/16/2014 3:09:08 PM PDT by Owen
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To: Owen

When you said “in” I thought you meant present day and not old history. This article is about relatively recent changes.


22 posted on 06/16/2014 3:16:26 PM PDT by thackney (life is fragile, handle with prayer)
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To: thackney

Oh come on, this is delusional.

When Alaska is down from 2+ million bpd to 500K and then nudges up 50K or 100K, that’s not a celebration event and cause to punch the air in optimistic glee.

That’s just noise.


23 posted on 06/19/2014 12:46:37 PM PDT by Owen
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To: Owen

Nudging up is hardly a sharp decline.

By the way, Alaska is one of the few real producers not even nudging up. They only recently fixed their horrible ACES profit-taxing plan and the companies are back to some better investments now for future production.


24 posted on 06/19/2014 12:50:10 PM PDT by thackney (life is fragile, handle with prayer)
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To: ckilmer

So will the state lower taxes or will the (Dem) parasites consume the surplus?

Quick, cut taxes before the parasites smell a surplus.


25 posted on 06/19/2014 1:09:43 PM PDT by Justa
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To: Justa

Oklahoma Legislature Passes Controversial Tax Incentive for New Oil and Gas Wells
http://stateimpact.npr.org/oklahoma/2014/05/23/oklahoma-legislature-passes-controversial-tax-incentive-for-new-oil-and-gas-wells/

House Bill 2562 replaces a tax incentive for horizontal drilling with one for both horizontal and traditional, vertical drilling.

The incentive reduced state taxes on oil and gas production, set at 7 percent, to 1 percent for the first four years of production. Horizontal drilling is now common practice and employed in most new wells drilled in Oklahoma.

The incentive expires in 2015...


26 posted on 06/19/2014 2:01:46 PM PDT by thackney (life is fragile, handle with prayer)
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To: Justa

It will be at least two years before we hit a surplus. But the likelihood is that Obama will go out in 2016 with a budget that is nearly balanced. The democrats will have had nothing to do with that balanced budget. They will have fought tooth and nail to prevent that from happening. But they will claim credit for it.

Same thing happened with Clinton. He fought Newt tooth and nail to prevent a balanced budget and then took credit for the balanced budget once it was achieved.


27 posted on 06/19/2014 8:11:51 PM PDT by ckilmer (q)
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To: thackney

Why the need for subsidies/crony capitalism?


28 posted on 06/20/2014 3:10:23 AM PDT by 1010RD (First, Do No Harm)
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To: thackney

Wasn’t that a Palin tax?


29 posted on 06/20/2014 3:13:14 AM PDT by 1010RD (First, Do No Harm)
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To: 1010RD

Reducing a tax that is only applied to one industry is considered a subsidy? How about all the other industries that don’t pay this tax at all?


30 posted on 06/20/2014 4:51:47 AM PDT by thackney (life is fragile, handle with prayer)
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To: 1010RD

Yep. It took years to even begin to undo the damage while most of the oil producing states grew in production.


31 posted on 06/20/2014 4:52:41 AM PDT by thackney (life is fragile, handle with prayer)
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To: thackney

I was just curious. This is an industry specific tax that they simply reduced? Why is the petroleum industry targeted for special/unique taxes?


32 posted on 06/20/2014 5:56:25 AM PDT by 1010RD (First, Do No Harm)
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To: thackney

Be careful. If someone catches you pointing out the clay feet of the Goddess...


33 posted on 06/20/2014 5:56:59 AM PDT by 1010RD (First, Do No Harm)
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To: 1010RD

This is an industry specific tax that they simply reduced?

Yes, this is called the gross production tax which is in addition to royalties and income and property taxes. To my limited knowledge, no other industry pays taxes on gross volume, only profits after costs.

- - - - - -

Why is the petroleum industry targeted for special/unique taxes?

Because big oil has lots of money and can afford it, don’t ya know. That’s why grandma has the oil company stock, because she can afford to pay more taxes.

Extra taxes on oil/gas are the normal in most locations. In Alaska, only oil/gas property pays property tax to the State. All other property is only taxed by the local municipality, which oil/gas pays as well. They never quit squeezing the golden goose.

I always find claims of government subsidy to oil/gas companies laughable. In reality, oil companies subsidies government; typical government take is 2~4 times the profit kept by oil/gas companies.


34 posted on 06/20/2014 6:31:33 AM PDT by thackney (life is fragile, handle with prayer)
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To: 1010RD

It wouldn’t be the first time. I was working the industry in Alaska at the time the tax was started, and put in retroactively. New work was shut down; my team fell to 1/3 its size. It helped motivate me to return to Texas.


35 posted on 06/20/2014 6:33:26 AM PDT by thackney (life is fragile, handle with prayer)
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To: thackney

I suspected that and had heard about it, but you know about “hearing” about things. I like it straight from the horse. Thanks and I appreciate your postings as always.


36 posted on 06/20/2014 8:29:00 AM PDT by 1010RD (First, Do No Harm)
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To: 1010RD

ExxonMobil for example,

profit kept from total revenue = 7.7%

taxes paid from total revenue = 21.7%

Government makes 3 times the money than this company does from the sales.

http://www.sec.gov/Archives/edgar/data/34088/000003408814000012/xom10k2013.htm
Ref page 36 & 53


37 posted on 06/20/2014 8:37:49 AM PDT by thackney (life is fragile, handle with prayer)
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To: thackney

Wow, we’ve really been snookered as a people. Imagine if those taxes were plowed back into energy development or used in the productive sector?

I had always thought of Alaska as a conservative, frontier-like place of laissez-faire, only to find out it’s a welfare queen.


38 posted on 06/20/2014 8:42:34 AM PDT by 1010RD (First, Do No Harm)
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To: 1010RD
Imagine if that expense was more inline with other industries. The prices the consumer would pay.

I had always thought of Alaska as a conservative, frontier-like place of laissez-faire, only to find out it’s a welfare queen.

A previous FReeper described it to me as "Redneck Socialist". I lived there for 4 years. A beautiful place, but his description had a little too much truth in it.

39 posted on 06/20/2014 8:45:16 AM PDT by thackney (life is fragile, handle with prayer)
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To: All

Conservatism usually respects and embraces normal and natural phenomena. It’s frequently astonishing to me how it often doesn’t respect and embrace the normal and natural inexorable decline of net oil joules.

Downward is inexorable and inescapable reality, and it’s normal and natural for US oil — especially when faced with the utter explosion of Chinese consumption. These progressive notions that tax policy can change the reality of a glass that is being drained eventually goes empty are frankly shameful, and they are the sort of notions that lead to refusal to burn up everyone elses oil first and eventually have complete global dominance.


40 posted on 06/20/2014 6:14:41 PM PDT by Owen
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