landowner

Drilling Costs - LA vs TX

A question for the experts.

 

Is it cheaper to drill a HS well in TX or LA given the tax structures currently in use?  For the sake of arguement, lets assume the wells are otherwise identical; same depth, lateral length, same completion technique, same pipeline constraints, etc.  Also assume the well productions are identical.

 

Just curious.  I would think that such matters will effect which part of the play has the more rapid development after unit wells are established and assuming the price of NG reaches a reasonable level.

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landownerPermalink Reply by adubu on February 21, 2011 at 2:15
Not sure about State Taxes but Federal Taxes should be same therefore " in field" drilling would depend more on the individual companies Cap Ex investments, profit, and location history of production if "sweet spot", drilling contracts in place, labor cost, lease requirements, permits, easy of drilling the location etc. I think there is more variable factors in profit margin of wells drilled than state taxes to be a major factor in choice to drill in Texas vs La. IMO

Oil & Gas ProPermalink Reply by The_Baron on February 22, 2011 at 5:43
I would venture to say that the Severance Tax Relief program in LA makes drilling horz. wells in LA more attractive.

landownerPermalink Reply by adubu on February 22, 2011 at 6:31
The_Baron---- in some of the "Tight High Cost Gas" formations the State of Texas gives relief from Severance Tax for first 10 years of production. I also agree with Les B that the tax structure is way down the list of factors determining drilling

Oil & Gas ProPermalink Reply by Les Bamburg on February 22, 2011 at 5:51
Phaco, tax structure would likely be way down the list of factors determining rate of development and of minimal consequence.

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