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Wildcatter Aubrey McClendon’s oil and gas startup in West Texas may be the latest venture in the Permian Basin to beckon for Wall Street investors, sitting astride one of the most lucrative U.S. shale plays.
The bear market in oil has analysts reassessing the U.S. shale boom after five years of historic growth.
The boom has been most generous to companies working in states with the most oil and gas activity, but the economic boost has also trickled down to steel-makers and machine tool manufacturers based in regions with no production, the report said.
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.
Half the increase in horizontal drilling over the last five months has happened in the Permian Basis, according to a new U.S. Energy Information Administration report.
The Legislature this year also has yet to reach an agreement on a generous tax incentive currently in place for horizontally drilled wells that reduces the tax from its regular rate of 7 percent to 1 percent.
Output rose 78,000 barrels a day to 8.428 million, the most since October 1986, according to Energy Information Administration data.
The 11,065-foot span is raising speculation that it was the longest horizontal length that ever has been drilled on land and under a river, one of the biggest obstacles Mother Nature can throw at a pipeline drill.
Rigs designed for horizontal drilling made a big move last year into the Permian Basin, the last major U.S. oil patch to remain a stronghold for older vertical units. But that’s small relief two years after a surge of oil field services startups left the U.S. market with far too much fracturing equipment and sent prices for fracturing jobs plummeting.