US Department of Interior dropping discount rate on low-producing oil wells

WASHINGTON (AP) -- The president of an Oklahoma City-based group of small oil producers says ending discounts for the producers will mean lost jobs in rural areas.<br/><br/>Producers whose wells generate

Thursday, July 21st 2005, 5:02 pm

By: News On 6

WASHINGTON (AP) -- The president of an Oklahoma City-based group of small oil producers says ending discounts for the producers will mean lost jobs in rural areas.

Producers whose wells generate fewer than 15 barrels a day currently get a discount on the royalties they're required to pay the government. But the Bureau of Land Management says it's ending the discount in February for the low-producing wells called stripper oil wells

Dewey Bartlett Junior of the National Stripper Well Association says the decision shows complete disregard of the economics of the small oil producers.

Government officials say ending the discounts would mean an addition $50-million a year that would be divided between the US government and the states.