Minimum bid takes lease near McInnis Canyons

A man whose company acquired oil and gas leases next to McInnis Canyons Conservation Area on Thursday says the acreage in question is “just a prospect area” with unproven reserves.

But when the chance presented itself to obtain the development rights for the minimum bid of $2 an acre at the Bureau of Land Management’s quarterly Colorado lease sale, it was too good for Matt Halker’s company to pass up.

“We figured if it was going for a relatively minimal rate, it would be worth looking at, and it was a minimal rate,” said Halker, managing member of Thomas Oil and Gas LLC in Parker, Colo.

Halker’s company bought the leases for a 480-acre parcel adjacent to the north side of McInnis Canyons, and a nearby, 320-acre parcel.

Halker said he’s aware of visibility concerns that have been raised over the specter of drilling near the conservation area.

“We’ll be taking everything into consideration,” he said.

He said his company only became aware the leases were being offered because of a recent Daily Sentinel story about them. His company wasn’t the one that nominated the parcels for leasing, even though it ended up being the only bidder, Halker said.

The acreage happens to be near areas his company already is looking at drilling. It will need to drill in those areas first and gauge results before evaluating how to proceed with the parcels acquired Thursday, he said.

“If they knew that there was oil and gas there, I’m sure it would have been drilled a long time ago, but … the oil and gas industry is an interesting one. Who knows if it’s there?” Halker said.

Halker has worked for a decade in the industry, but his company is relatively new and has never done any drilling, he said.

Only 11 of 58 lease parcels offered Thursday by the BLM were sold, something BLM spokesman Jim Sample said appears to reflect the depressed energy market. But all the leases offered in western Colorado were sold.

Exxon Mobil Corp., which has been actively drilling in Rio Blanco County, made the sale’s highest per-acre bid, $215, for an 81-acre Rio Blanco parcel, and it paid $200 per acre for an 80-acre parcel there.

New Mexico company Yates Petroleum Corp. paid the sale’s highest total amount, $39,424, or $16 an acre, for a 2,464-acre Garfield County parcel west of De Beque, and $11 an acre for a 1,248-acre parcel in the same area.

Thursday’s lease sale was to have included 800 acres for geothermal development near Buena Vista. The BLM, however, deferred what would have been its first-ever geothermal lease in Colorado so it could continue to work with the state on issues surrounding the lease.

It also decided to defer leasing a 907-acre parcel in Moffat County because the parcel includes land near a stream, and a new management plan the BLM is working on for that region would ban drilling activity within a quarter mile of streams, Sample said.


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