Oklahoma Oil, Gas Revenue Gains Point to Recovery as Slump Lingers

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DALLAS – Oklahoma oil and gas production tax revenues rose for a second month, pointing to a recovery in the state's energy sector, even as overall revenues fell again in November.

Gross production taxes on oil and gas generated $34.1 million, up by $3.9 million, or 12.9%, from November 2015. Prior to October, gross production tax collections had been lower than the prior year each month since December 2014.

However, the increase in production tax revenue was not enough to compensate for the decline in other tax sources, state Treasurer Ken Miller said. Total revenues fell 4.3%, representing the 21st consecutive month of falling income.

"It would appear our anchor industry is making slow but steady improvement, while the spillover effect of the long energy price downturn on income and consumer spending is ongoing," Miller said. "My hope is that we will begin to see overall improvement with renewed oil field activity following OPEC's plans to cut production levels and bring supply more in line with demand."

The Oklahoma report on oil and gas revenue coincides with a similar report from Texas Comptroller Glenn Hegar, who said that November oil and gas production tax revenue rose 2.2% in November after 22 straight months of decline.

November gross production collections are based on production activity from September, when benchmark West Texas Intermediate crude oil sold for $45.18 per barrel.

Oklahoma's motor vehicle collections in November exceeded those of the prior year, rising $1.1 million, or 2.1%, Miller said. Gross income tax collections, a combination of individual income and corporate income tax collections, fell $27.5 million, or 10.3%, from last November. Sales taxes were $19 million, or 5.3%, below collections from a year earlier.

The Sooner State's November gross receipts totaled $794.8 million, the lowest November total since 2010, Miller said. Collections during the past 12 months, at $10.8 billion, are the lowest since January 2012, he added.

More broadly, Oklahoma's unemployment rate in October was higher than the national jobless number for the fourth month in a row. The state's rate was reported at 5.2%, while the U.S. rate was set at 4.9%. Prior to July, the state's monthly jobless rate had been consistently below the U.S. rate for 26 years.

The Oklahoma Business Conditions Index, predicting economic activity for the next three to six months, was set at 43.3 in November. It is the sixth straight month the state has had numbers below 50, which indicate continued economic slowing, Miller said.

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