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Long-lateral legislation benefits state

May 24, 2017
The Oklahoma Independent Petroleum Association today applauded the approval of Senate Bill 867 by the House of Representatives, saying the legislation will benefit Oklahoma’s defining industry and the state as a whole.

The bill will create the Oklahoma Energy Jobs Act of 2017 and allows for multiunit, or long-lateral, drilling in all rock formations in the state. The bill also includes provisions that ensure existing oil and natural gas producers, both vertical and horizontal, are protected as long-lateral drilling moves into areas of historic oil and natural gas production.

“This is a win for the state of Oklahoma,” OIPA Executive Vice President of Governmental Affairs Tim Wigley said. “Not only will this legislation generate more tax dollars, but it is sure to attract more investment in Oklahoma oilfields from independent oil and natural gas producers utilizing advanced drilling technology.”

In its first year, SB 867 is expected to generate approximately $490 million in new royalty payments, raise more than $229 million in new state and local revenues and create nearly 6,000 new jobs in the oil and gas sector. Additionally, the measure is expected to spur nearly $6 billion in investment from oil and natural gas producers.

In 2011, Oklahoma lawmakers enacted the Shale Reservoir Development Act, allowing oil and natural gas producers to combine two 640-acre production units to accommodate horizontal drilling up to two miles long while developing shale oil and natural gas reservoirs. As horizontal drilling has moved into non-shale reservoirs, the modernization of regulation and legislation became a key issue for the state’s oil and natural gas industry.

“Marrying 100 years of oil and natural gas production and the regulations related to it with new regulation and legislation for advanced drilling techniques is not an easy task,” Wigley said. “It has become imperative for Oklahoma oil and natural gas producers to embrace long-lateral drilling in all producing formations. Doing so puts our state on par with other energy-producing states in the nation and keeps Oklahoma’s oil and natural gas industry moving forward.”

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