BLM Mont/Dakotas holds oil and gas lease sale post shutdown
November 1, 2013
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 today netted $826,332 in revenues from the sale of 84 Federal leases, totaling 20,845 acres, in Montana, North and South Dakota. The BLM staff was able to quickly coordinate details after the Federal government shutdown ended last week, and the quarterly sale took place at the BLM's Montana State Office in Billings.
Yellowstone Exploration, LLC of Richardson, Texas submitted the highest per-acre bid at $12,300 per acre for a 18.3-acre parcel located in McKenzie County, N.D., which was also the highest single-parcel bid at $233,700.
Prior to the opening of the lease sale, BLM State Director Jamie E. Connell thanked the BLM staff for their dedication and hard work required to finalize details required to pull off the sale on short notice and also expressed her gratitude to those bidders attending for their patience and flexibility.
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.
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The next BLM Federal oil and gas lease sale is scheduled for Jan. 28, 2014, 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.