Okla. lawmakers to unveil new drilling incentive

OKLAHOMA CITY (AP) – An incentive for a 1 percent tax rate for horizontally drilled oil and gas wells would be increased to 2 percent and extended to all wells drilled in Oklahoma under a bill drafted in the Oklahoma Legislature on Monday.

The bill, which is expected to be considered by House and Senate budget panels on Tuesday, calls for the new 2 percent rate to be in effect for the first three years of a well’s production. After that, the rate would increase to the standard production tax rate of 7 percent.

The tax rate on production from traditional vertical wells, which is currently 7 percent, would also drop to 2 percent for three years.

“I think it’s a fair compromise that accomplishes the goal of certainty and simplicity,” said Chad Warmington, president of the Oklahoma Oil and Gas Association. “Although we’d like to see a longer term … I think it’s fair to both the industry and the state.”

Read the complete story from the AP.