The Average North Dakota Oil Well Will Pay Nearly 23% Of Its Profits In State Taxes
There are almost 7,000 wells in the state that will produce an average of 540,000 over an average 29 year lifespan and produce $20 million in profits.
Each well will also pay $2,200,000 in state gross production taxes at 5%, $2,000,000 in state extraction taxes at 6.5% and $385,000 in state sales tax for a total average of $4,585,000 (remember none of this includes federal taxes).
Additionally each well will pay an average of $7.5 million to mineral rights owners, $2.1 million in salaries and wages and $2.3 million in other operating expenses.
Using these figures, that’s a roughly 18% per-well profit margin before the federal government takes their share. Anyone familiar with a profit and loss statement from a business knows that’s not all that large a margin at all.
So much for “greedy big oil.”Tags: bakken, North Dakota News, oil