June 9 (UPI) — The economy in shale-rich Oklahoma has recovered from last year’s market downturn as gross tax receipts improve, the state treasurer said.
Oklahoma accounts for as much as 5 percent of the total national output of crude oil, making it one of the more significant oil producers in the nation. It’s the fifth-largest shale natural gas producer in the country.
Spending in Oklahoma shale basins declined last year during the market downturn, putting a strain on state coffers.
The state government reported gross tax receipts for May at $854.8 million, up 9.2 percent from last year. Gross production taxes on oil and gas generated $38.8 million, an increase of 61 percent from last May.
“Our analysis of all major sources of revenue deposited into the treasury would appear to indicate Oklahoma’s economy is recovering from the energy downturn,” State Treasurer Ken Miller said in a statement.
Gov. Mary Fallin last week signed off on a new budget that her office said closes an $878 million gap while keeping social services like hospitals and nursing homes running. The 2018 budget is $37.7 million, or about a half percent, lower than the appropriated budget for this year.
In a nod to a weakened energy market, where crude oil prices are still about half what they were three years ago, the governor said a 3 percent increase in gross production tax would help keep the state government open and running.
Despite the year-on-year gains, Miller’s office reported headwinds remained in the state energy sector. May production tax collections from oil and natural gas in May were down 5.8 percent from the previous month.
Oilfield services company Baker Hughes reported 126 rigs in active service last week, up 2.4 percent from the previous week. Rig counts serve as a loose metric to gauge the industry’s interest in spending in a particular sector. Texas, the No. 1 oil producer in the country, saw its rig count increase by about 1 percent last year.