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Senator Cooper says Wyoming crude sells at a discount to national benchmarks, warns on royalty impacts
Summary
Senator Cooper explained on the Senate floor that Wyoming crude typically receives discounts versus West Texas Intermediate and said royalties and taxes reduce producer receipts, potentially making current well economics difficult.
Senator Cooper spoke briefly on the floor March 6 about how Wyoming oil and gas volumes are priced relative to national benchmarks, warning that discounts and royalties reduce net receipts for producers and can affect drilling economics.
"When we see this, WTI number, back $14 off of that," Cooper said, referring to West Texas Intermediate pricing and noting that much Wyoming crude tracks Western Canadian Select pricing. He said natural gas pricing is tied to Henry Hub and estimated Wyoming receipts are "about 50¢ off of that." Cooper added that after royalties and taxes — which he characterized roughly as 40 percent — a $65 WTI price can translate to about $30 per barrel revenue to cover a horizontal well's costs under current assumptions. "There's gonna be no drill, baby, drill for a while in Wyoming," he said, adding that global geopolitical factors control oil prices.
The senator framed the remarks as an explanation of the real-world prices that affect Wyoming producers and state revenue from production, and he did not propose legislation on the floor at that time.
