The Oklahoma Corporation Commission approved an emergency order on April 22 that allows oil producers to stop or reduce production without losing their leases for non-production.
The three-member, all-Republican panel that regulates the oil and gas industry in Oklahoma issued its emergency order Wednesday amid a collapse in oil prices. The per-barrel price has plummeted as demand dried up, and an oversupply has limited storage capacity.
One Oklahoma producer who testified that he operates about 600 wells in the state said he is currently losing $200,000 monthly by producing from economically challenged wells.
“No one understands the oil business better than Oklahoma’s operators,” Commissioner Dana Murphy said in a statement after approving the order. “Today’s action by the Commission gives those operators the freedom and flexibility they need to respond to market forces and decide what actions to take to survive.”
The price of a barrel of U.S. oil to be delivered in June jumped 19% to settle at $13.78 on April 22. The big gain, though, means it has recovered just a fraction of its steep losses. The per-barrel price was close to $30 at the start of last week and nearly $60 at the beginning of the year.
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