Jericho Oil Corporation announced it signed a letter of intent to purchase a 50 percent working interest in 2,050 acres of land in Oklahoma, according to a press release. The new land will bring Jericho's acreage up to more than 5,800 acres.
Once the transaction is completed, Jericho plans to build its second platform and focus on developing legacy productive basins in the area. Currently, the land has oil- and natural gas-producing wells with an output of about 7 barrels of oil equivalent per day.
"The market's recent turbulence has provided us an opportunity to focus our efforts on acquiring assets with good, long-term development potential at favorable pricing," said Jericho CEO Allen Wilson.
According to the press release, Oklahoma is a natural step in the company's progress, as it ranks fifth in crude oil production and fourth in natural gas production in the U.S.
As Jericho expands into Oklahoma, the state continues to debate tax incentives for oil and natural gas production, according to The Oklahoman. The Oklahoma Policy Institute opposes the tax incentives on the resources stating it will cost the state $516 million in revenue this fiscal year.
The Oklahoma Oil and Gas Association and the Oklahoma Independent Petroleum Association disagree and say the tax incentives are good for the state as they boost production and therefore lead to higher gross tax collections, The Oklahoman reported. The OIPA also stated the Oklahoma Policy Institute did not take into consideration the employment income and sales tax benefits of more oil and natural gas work in the state.
"The oil and natural gas industry accounts for 25 percent of all taxes paid in Oklahoma when those two tax streams are combined with the gross production tax and corporate income taxes," said OIPA Vice President of Legislative Affairs James Roller, The Oklahoman reported.