Arkansas top spot for oil and gas investments

The global petroleum industry considers Arkansas the best place for oil and gas investments with Oklahoma ranked ninth, according to Calgary, Canada-based Fraser Institute.

Arkansas ranked first out of 143 “jurisdictions” surveyed, with the results based on a survey of petroleum executives and managers around the world. According to Fraser, the 577 respondents represent 276 companies with combined 2008 exploration and development budgets of $200 billion, or more than 50% of global upstream expenditures in 2008.

“I’d say it is good here,” Bill Hanna, president of Fort Smith-based Hanna Oil and Gas, said when asked about the validity of the Fraser survey. “We do have low taxes and we do have a favorable environment for drilling. … Our finding costs (exploration and drilling costs) are probably some of the lowest in the country.”

Hanna Oil and Gas has operations in several U.S. states and in Canada.

Arkansas was ranked third out of 81 jurisdictions in 2008, but moved into the number one spot out in the 2009 edition of the Fraser Institute’s Global Petroleum Survey 2009.

“The dominance of U.S. states as favorable jurisdictions for oil and gas development once again shows how the industry values stability and a clear and transparent regulatory environment,” Gerry Angevine, Fraser Institute senior economist and coordinator of the annual petroleum survey, noted in a press release.

The Top 10 jurisdictions in the 2009 global Fraser ranking are:
1. Arkansas
2, Alabama
3. Kansas
4. Austria
5. Mississippi
6. Nebraska
7. South Dakota
8. Texas
9. Oklahoma
10. Indiana

Criteria used in the ranking included environmental regulations, cost of regulatory compliance, business infrastructure, political stability, tax policies and the availability of “quality” schools, hospitals and recreational facilities.

“Investors prefer to avoid jurisdictions with high royalty rates and costly and time-consuming regulations. Other factors being equal, competitive tax and regulatory regimes can attract investment and generate substantial economic benefits,” Angevine noted in the statement.