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State's energy boom reflected in rising drilling rig counts

Devon, Continental and Chesapeake say higher production taxes will mean fewer rigs operating in Oklahoma.
by Adam Wilmoth Modified: May 5, 2014 at 10:00 am •  Published: May 4, 2014

Executives from Oklahoma City’s three largest oil and natural gas companies told The Oklahoman this week that they would be forced to move rigs out of the state if the tax rate were increased.

Fellow oilman George Kaiser, however, said tax rates are a small factor in deciding where to drill and are unlikely to lead investment away from Oklahoma.

The ongoing shale oil and natural gas drilling boom has led to increased drilling throughout the state and region.

Oklahoma’s rig count has soared to 195 as of Friday, up more than 180 percent from a recent low of 69 in September 2009. The state is now No. 2 in the country in rig count, slightly ahead of North Dakota at 176 and well behind Texas at 891, according to Baker Hughes.

Each rig supports up to 100 employees, including contractors. Most of those workers are used in the completion processes, including hydraulic fracturing, or fracking.

“The good thing is we’re seeing a takeoff in production. What we’ve had has been an effective tool,” said Harold Hamm, CEO at Continental Resources Inc. “If something doesn’t happen, the state’s going to have a great benefit from what’s happening out there — if we don’t kill the golden goose.”

Higher gross production taxes, he said, could cook the gander.

Steady taxes are especially important because the resource in Oklahoma is not as good as that in Texas and North Dakota, said Doug Lawler, CEO at Chesapeake Energy Corp.

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by Adam Wilmoth
Energy Editor
Adam Wilmoth returned to The Oklahoman as energy editor in 2012 after working for four years in public relations. He previously spent seven years as a business reporter at The Oklahoman, including five years covering the state's energy sector....
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Oklahoma’s rig count has soared to 195 as of Friday, up more than 180 percent from a low of 69 in September 2009. The state is now No. 2 in the country in rig count, slightly ahead of North Dakota at 176 and well behind Texas at 891, according to Baker Hughes.

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