Bids low for oil, gas leases on BLM land
Concerns for trout exempt 907 acres
An oil and gas lease sale much reduced from its originally intended size netted per-acre bids Thursday well below those seen in recent Bureau of Land Management sales in Colorado.
The sale became smaller yet when the BLM on Wednesday deferred leasing of a 907-acre parcel in the headwaters of the Little Snake watershed in Moffat County. The agency acted in response to concerns by Trout Unlimited about possible effects on Colorado River cutthroat trout.
The BLM sold leases on 26 parcels offered at its quarterly sale, with no one making the minimum $2-per-acre bid on a 27th parcel. The 11,257 acres sold yielded $248,058, 49 percent of which will go to the state.
The highest per-acre price was $250, by Synergy Petroleum Corp., for an 80-acre parcel in Weld County. Yates Petroleum Corp. offered the highest overall bid, $80,000, for 800 acres in Routt County. A 359-acre parcel north of Rifle went for the minimum $2 per acre.
By comparison, a November lease sale included a bid of $10,600 per acre for 448 acres in the Garfield Creek area of Garfield County. And in August, the leasing of some 55,000 acres on the Roan Plateau near Rifle included a bid by Williams Production RMT of $11,800 per acre for 2,140 acres.
Those prices were fetched for parcels near areas of natural gas drilling success.
In addition, oil and gas prices have fallen considerably in recent months, causing a slowdown in drilling in Colorado.
BLM spokesman Steven Hall said it’s hard to speculate on exactly what factors might have helped depress bid prices Thursday.
Besides lower energy prices, another factor might have been the fact that the sale included a relatively small amount of acreage scattered around the state. Less acreage also may offer less chance of hitting drilling sweet spots, Hall said.
Initially, the sale was to have included 120 parcels containing more than 133,000 acres, much of it on national forest land.
However, the U.S. Forest Service requested that some parcels be removed because they were within proposed roadless areas and had been made available in error.
The Forest Service later had the BLM defer leasing another 57 parcels comprising more than 66,000 acres, to allow for further study.
The move came in response to numerous protests over possible wildlife impacts if drilling occurred.
Trout Unlimited praised Wednesday’s deferral of the Moffat County parcel, saying it reflected “new leadership within the agency.”