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8:37 am
Sat January 4, 2014

Oklahoma Speaker Wants to Continue Drilling Breaks

Okla. speaker wants to continue drilling breaks

Oklahoma Capitol
Credit KWGS News Photo

OKLAHOMA CITY (AP) — House Speaker T.W. Shannon says he wants to extend a generous tax break for horizontal drilling in Oklahoma, saying the incentive is encouraging economic activity in the state.

Shannon issued a statement Friday saying he intends to introduce a bill that would make permanent the tax break for horizontal drilling that was initially implemented in the 1990s when such drilling was experimental and very costly.

While the gross production tax on oil and gas production typically is 7 percent, producers are exempt from all but 1 percent of that if they drill qualifying deep or horizontal wells.

Governor Mary Fallin's Secretary of Finance Preston Doerflinger has said the tax breaks cost the state about $321 million last fiscal year and should be re-examined by legislators next session.