Tax bill will lift oil industry into new territory, oil-field CEO says
While the Republican tax bill heads to President Trump’s desk for his signature, companies are already adjusting their strategies to account for sweeping tax cuts.
On Wednesday, a host of corporate giants, including AT&T (NYSE:T) and Boeing (NYSE:BA), announced they would hire more workers and invest more capital after Congress approved the tax legislation, which is expected to lower the corporate tax rate by a dramatic 14 percentage points.
Meanwhile, Canary, LLC CEO Dan Eberhart says his oil company is also planning to reinvest the extra profits, telling FOX Business’ Stuart Varney on “Varney & Co.,” “There’s two components. One is ordering more capital equipment, which is what the expensing provision of the new tax reform bill allows us to do, and the second leg of that is hiring more people which we are furiously working on right now.”
According to Eberhart, all businesses want to grow, but companies in the oil industry in particular have struggled over the past couple of years due to unstable economic conditions.
“We’ve had a period in [the] oil and gas business where, the last two years we really underinvested, because the market has been so bad, but that’s now better, it’s been much better this year. And so, what the tax reform package is allowing us to do is really dial up our capital spending even more, so we’re going to try to achieve 50% revenue growth next year in 2018 over 2017.”
Now, Eberhart sees the U.S. oil industry as being competitive with global market leaders.
“I think that what goes unsaid is the U.S. oil production is really on par with Saudi Arabia. We’re just such a big market we don’t export as much, so much of it. But look, I think the oil export story is a great story, we’re exporting about twice as many barrels a day as we did a year ago.”
And tax cuts have the potential to boost the industry even further.
“I think that’s great for the American economy and I think that, you know, this tax cut is going to lift our industry and put more money in our workers’ paychecks with the reduction in the tax rate and the reduction in the W-2 income and I think that we’re going to have an energy dominant America is going to continue to soar.”