BLM Montana/Dakotas oil and gas lease sale nets just under $50 million
BILLINGS, Mont. – As part of President Obama’s all-of-the-above strategy to continue to expand safe and responsible domestic energy production, a Bureau of Land Management (BLM) oil and gas lease auction July 17, netted $49,842,283 in revenues from the sale of 87 Federal leases, totaling 19,015 acres, in North and South Dakota. The quarterly sale took place at the BLM’s Montana State Office in Billings.
Continental Resources Inc. of Oklahoma City, Okla., submitted the highest per-acre bid at $33,000 per acre for a 28.75-acre parcel located in McKenzie County, N.D. Continental Resource Inc. also submitted the highest single-parcel bid at $6.8 million for a 400-acre parcel located in Mountrail County, N.D.
BLM oil and gas leases are awarded for a period of 10 years and for as long thereafter as there is production in paying quantities. The revenue from the sale of Federal leases, as well as the 12.5 percent royalties collected from the production of those leases, is shared between the Federal Government and the states.
The 2012 sales across the west offered more than 1.4 million acres of public land in 1,707 parcels and reflected a continued increase in the average price paid per acre. The price drillers are willing to pay for onshore parcels has more than tripled in the past three years, compared to the last 25 years. Since 1988, the average price paid per acre was $55, while over the past three years, the average was $210.
Potential environmental effects that could result from exploration and development are analyzed before any leases are offered for sale. All leases come with conditions on oil and gas activities to protect the environment that can include limits on when drilling can occur or restrictions on surface occupancy. Once an operator proposes exploration or development on a BLM-issued lease, further environmental analysis under the National Environmental Policy Act is conducted to determine the site-specific need for various types of impact-limiting or mitigation measures. In addition, many operators routinely use Best Management Practices such as remote monitoring of producing wells and multiple wells per pad to minimize surface impacts.
The next BLM Federal oil and gas lease sale is scheduled for Oct. 22, 2013, at the BLM’s Montana State Office, located at 5001 Southgate Drive, Billings, Mont. Additional information regarding competitive sale lists, detailed results of sales, and the leasing process is available by writing the Bureau of Land Management, 5001 Southgate Dr., Billings, MT 59101, by calling (406) 896-5004, or at http://www.blm.gov/mt.
–Bureau of Land Management
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