Oklahoma business energy news

[ou48A]

Because I think the state needs more money and we tax oil companies way too low.

Please correct me if I'm wrong... I am not an expert on this matter.

Before horizontal drilling took center stage a very large amount of our states oil production came from low production wells (striper wells)…. To remove the taxes on this type of well would most often mean well abandonment and plugging the well forever. This would be extremely short sighted!

Not only would we lose their oil & NG production, we would lose good jobs and corporations that both pay taxes. We would also lose the taxes collected on equipment, services and supplies.

But still worse is the opportunity that would be forever lost with new secondary recovery methods and new well simulation methods. With these new methods and the right economic conditions many of these wells can still produce increased amounts of hydrocarbons and pay very large amounts of taxes.

Most horizontal wells have a very high depletion rate. It won’t be long before many of these wells enter their striper well stage of life. This type of production is a strategic resource not to be wasted.

The oil and NG industry is generally the highest taxed industry in the USA. Taxing them more will eventually cause harm to the consumers and to the nation’s economy with the inflationary pressures of higher oil prices.

[Plutonic Panda]

Dont disagree that some operations are taxed too low, however raising taxes on marginal wells in the worst pricing environment in 15 years is probably not the best place to start. If wells are marginally economic at the current price of oil, I don't think it would be wise to raise taxes and make them even less economic. The state would probably lose more money from production on all the wells that would have to be shut in or plugged than it would make on the tax increase. That's just speculation, but not implausible.

I agree with that.

[Plutonic Panda]

Before horizontal drilling took center stage a very large amount of our states oil production came from low production wells (striper wells)…. To remove the taxes on this type of well would most often mean well abandonment and plugging the well forever. This would be extremely short sighted!

Not only would we lose their oil & NG production, we would lose good jobs and corporations that both pay taxes. We would also lose the taxes collected on equipment, services and supplies.

But still worse is the opportunity that would be forever lost with new secondary recovery methods and new well simulation methods. With these new methods and the right economic conditions many of these wells can still produce increased amounts of hydrocarbons and pay very large amounts of taxes.

Most horizontal wells have a very high depletion rate. It won’t be long before many of these wells enter their striper well stage of life. This type of production is a strategic resource not to be wasted.

The oil and NG industry is generally the highest taxed industry in the USA. Taxing them more will eventually cause harm to the consumers and to the nation’s economy with the inflationary pressures of higher oil prices.

Thank you for that information. I was unaware that these wells would be in danger of completely closing if this happened.

[bradh]

Thanks ou48a, I knew someone could explain it better

But still worse is the opportunity that would be forever lost with new secondary recovery methods and new well simulation methods. With these new methods and the right economic conditions many of these wells can still produce increased amounts of hydrocarbons and pay very large amounts of taxes.

Which means, plugging the well forever means $0 revenue in the future, even if the production tax never gets raise from the 2% that it is now. 2% of something is better than 2% of zero.

[ou48A]

Thank you for that information. I was unaware that these wells would be in danger of completely closing if this happened.

Every state in the nation has rules set by state agencies (fed’s too) that at some point mandate that wells be responsibly plugged…In most cases I believe most states go with a year after production stopped?

But unless it’s believed they could cause environmental damage or there is another complying reason I would like to see the time expanded by a very large amount because there is still a giant amount of unrecovered oil in the rocks that some of the new methods might be able to get at?

[ou48A]

Thanks ou48a, I knew someone could explain it better



Which means, plugging the well forever means $0 revenue in the future, even if the production tax never gets raise from the 2% that it is now. 2% of something is better than 2% of zero.

They are also contributor to national security!

[Just the facts]

So we can't tax them in the good times because that will lead to bad times, and we can't tax them in bad times because that will prevent return of the good times. So when should we tax them?

This reminds me of a young couple debating when to have children. You just have them and life will sort itself out.

[sooner88]

WPX Energy (who bought RKI Exploration) is closing their OKC office and laying off 60 employees and offering jobs to an additional 33 in other offices.

WPX Energy to close OKC office, lay off 60 employees | News OK

[BillyOcean]

was that really a surprise...I loved how the OKC people believed that they would leave that office open when RKI was bought.

[BG918]

WPX is doing everything they can just to stay afloat. They may not make it another 6 months unless oil prices go up.

[BillyOcean]

^^^^^
did not realize the situation was so dire....not good.

[Thomas Vu]

Wow, I interviewed for a position in that building too to help with the takeover. Somewhat glad I didn't get in now.

[blangtang]

*CONTINENTAL RESOURCES HALTS ALL FRACKING IN BAKKEN SHALE

saw this on the business wire, still looking for more info on it

[zookeeper]

*CONTINENTAL RESOURCES HALTS ALL FRACKING IN BAKKEN SHALE

saw this on the business wire, still looking for more info on it

Investor's Business Daily
Continental Stops Bakken Fracking; Upbeat On New Play | Stock News & Stock Market Analysis - IBD

Continental Resources[ticker symb=CLR], a top producer in the Bakken shale formation, said Wednesday it has ceased fracking operations there amid the continued slump in oil prices. The bellwether shale company had already planned to defer most Bakken completions in 2016. It has four operated drilling rigs in the North Dakota Bakken with plans to maintain that level through the year. But Continental said it currently has "no stimulation crews deployed in the Bakken." Shares were up 2% in after-hours trading in the stock market today. Continental posted an adjusted net loss of 23 cents per share in Q4, down from a profit of $1.14 per share a year ago. Analysts polled by Thomson Reuters were expecting a loss of 21 cents per share. Revenue sank 55.6% to $575.5 million, above views for $568.2 million. But Continental was bullish on acreage in its STACK play in Oklahoma, and expects an average estimated ultimate recovery of 1.7 million barrels of oil equivalent per well. "Our overpressured Meramec wells in STACK are delivering some of the highest returns in the Company," said COO Jack Stark in a statement. "We clearly have another high impact, long-term platform for growth underlying our 155,000 net acres of leasehold in STACK." The company plans to average four-to-five operated drilling rigs in the STACK play in 2016. Last month, Continental guided 2016 capital spending to $920 million, down 66% from 2015. It also sees production falling during the year on lower drilling and well completion activity. Other shale companies reported Q4 results below estimates late Wednesday and further reduced capital spending plans. Concho Resources[ticker symb=CXO] swung to a Q4 adjusted loss of 7 cents per share from a profit of 88 cents per share a year ago, missing views for a profit of 4 cents a share. Revenue sank 34.5% to $389.2 million, well below views of $525.4 million. Concho sees 2016 capital spending of $1.1 billion-$1.3 billion vs. $1.8 billion in 2015, which was already a 20% drop from 2014. The company expects full-year 2016 production will be flat-to-down approximately 5% vs. 2015. Shares were unchanged late. Oasis Petroleum's[ticker symb=OAS] earnings tumbled 85.7% to 5 cents a share, missing analyst estimates by a penny. Revenue fell 39.2% to $182.1 million, under views for $238 million. Oasis set its total capex budget at $400 million, down from $610 million in 2015, when it dropped 61%. For the year, Oasis said that 70% of its projected oil volumes are hedged to more than $51 per barrel for U.S. crude. On Wednesday, West Texas Intermediate futures settled at $32.15 a barrel, up 0.9%. Oasis shares jumped 4% after hours. Unlike Exxon Mobil[ticker symb=XOM] and other integrated oil majors, shale producers don’t have downstream operations that benefit from cheap oil to help cushion profit during price slumps. Earlier this month, Cabot Oil & Gas'[ticker symb=COG] quarterly results swung to a loss and Pioneer Natural Resources[ticker symb=PXD] posted a better-than-expected loss but cut its spending outlook just a month after offering more bullish guidance. EOG Resources[ticker symb=EOG] reports Thursday. EOG is expected to swing to a 31 cent per-share loss down from a per-share profit of 79 cents. Revenue is expected to fall 53.2% to $525.4 million. Earlier Wednesday, Royal Dutch Shell[ticker symb=RDSA] said it is closing its unconventional resources unit, with its shale assets becoming part of its upstream business, and projects in Canada becoming part of its downstream unit. Chesapeake Energy's[ticker symb=CHK] Q4 results swung to a loss and revenue fell 47.5%. The oil and gas producers said it has signed deals to divest $700 million in gas fields and other assets, well above its $200 million-$300 million target, and plans to sell $500 million-$1 billion in additional assets this year. Chesapeake will also cut 2016 capital spending by 57% to $1.3 billion-$1.8 billion and sees production falling by as much as 5% excluding asset sales. Meanwhile, the Energy Information Administration said that U.S. inventories rose by 3.5 million barrels vs. the 7.1 million barrel build the American Petroleum Institute, an industry group, reported late Tuesday. Analysts expected a rise of 3.4 million barrels.

[zookeeper]

Dickinson, ND Newspaper a couple of hours ago - before the news about the halt.

Continental Resources quarterly loss misses expectations | The Dickinson Press

Things go from bad to worse in North Dakota.

Per Reuters in The Fargo Forum newspaper:

ND's largest oil producer Whiting suspends fracking, slashes budget after big loss

So, in two hours, Continental and Whiting Petroleum, the two largest producers in ND announce halts.

[Tundra]

But oil is surging on the market now, surely everything is okay.... We're back baby! Get out people before you lose big time....

[onthestrip]

This is needed. Why does our state subsidize something the free market cant sustain? Thats not the republican way I thought? And this marginal well tax credit is going to cost taxpayers $25 million this year. Not to mention the already sweet deal they got with a 2% gross production tax. Yet oil execs are writing op-eds complaining about wind subsidies. Maybe thats just trying to distract from how good of deal they have right now.

http://okenergytoday.com/2016/05/okl...ate-bill-1577/

[Plutonic Panda]

http://newsok.com/oklahoma-energy-co...rticle/5509868

[dankrutka]

Without getting into the politics of the election results, does this mean Harold Hamm could be the Secretary of Energy?

[Anonymous.]

Very likely.

Energy secretary

Continental Resources CEO Harold Hamm has long been seen as a leading candidate for Energy Secretary. Hamm, an Oklahoma billionaire who has been a friend of Trump’s for years, has been the leading influence on Trump’s energy policy during the campaign.

If Hamm passes, venture capitalist Robert Grady is also seen as a top candidate, though he could also be in line for Interior.

[gopokes88]

Without getting into the politics of the election results, does this mean Harold Hamm could be the Secretary of Energy?

Yes. It is also likely Fallin gets a post. She was loyal early often and late.

[Swake]

Yes. It is also likely Fallin gets a post. She was loyal early often and late.

Sounds great, the two individuals most responsible for our earthquake problems with even more power. Nothing could go wrong there, right?

[David]

Make American Shake Again.

[sooner88]

Hamm sent an email to all employees today stating that he remains committed to the company and OKC, and his focus will remain on building the company.

[onthestrip]

Hamm sent an email to all employees today stating that he remains committed to the company and OKC, and his focus will remain on building the company.

Wouldnt he have to give up his CEO position to be energy secretary? I would assume hed rather stay in control of Continental and just advise the president on energy.