Should Oil Companies get $4.4 billion in Tax Breaks?
Executives from the five largest oil companies were scheduled to appear before a Senate finance committee to answer questions about tax breaks that saved them an estimated $4.48 billion in 2010.
With gas prices over $4.00 a gallon in many parts of the country, and oil companies reporting profits at all-time highs, some lawmakers are wondering if tax breaks for oil companies are the best idea when consumers and government are struggling with debt.
One such tax break allows oil companies to treat royalties paid to foreign governments as a foreign tax, and so that revenue can be deducted from declared earnings in the U.S.
Of course, that tax break doesn't affect the oil companies that are focused on production in the U.S., like the small companies working the Bakken oil pool in the Western U.S.
Because the Bakken is a new discovery, many of these companies working the Bakken have only recently become profitable. That means they have accumulated tax credits that will help them maximize profits in the future, with or without the tax breaks currently under consideration.
The Bakken oil pool contains at least 4.5 billions of barrels of oil. And the recent temporary correction for oil prices has left Bakken oil stocks trading at very attractive valuations.
One top Bakken stock recommended by Wyatt Investment Research now trades with a forward P/E of just 11, even though profits will grow 250% this year.
50% gains or better are expected for this Bakken oil producer. For more, click HERE.
