Lease to yield nearly $5M to split between feds, state

Oil and gas rights leased near New Castle on Thursday will yield almost $5 million in bid revenue to be split between the federal government and the state of Colorado.

However, the Colorado Division of Wildlife had voiced concerns over the land being leased because it provides important big game habitat.

The Bureau of Land Management sold 30 of 33 parcels offered at its quarterly Colorado oil and gas lease sale Thursday. The sale involved 11,903 acres and earned $5.95 million in bids, but $4.8 million of that went for 448 acres in the vicinity of the Garfield Creek State Wildlife Area south of New Castle.

Those acres went for $10,600 per acre to winning bidder Baseline Minerals Inc., of Denver. Baseline leases minerals on behalf of clients, according to its Web site.

BLM spokesman Steven Hall said the land in the New Castle area consists of three 40-acre parcels just east of the state wildlife area, and a 328-acre site to the west, adjacent to the Colorado River.

Hall said the DOW sent the BLM a letter after the leasing protest period expired. Among its concerns was that the 328-acre site is important for elk production and winter habitat, and is critical mule deer range, Hall said.

DOW spokesman Randy Hampton said the state wildlife area and surrounding terrain comprise one of the last contiguous pieces of mule deer winter range in Garfield County.

“It’s a critically important parcel for us,” he said.

Hall said the leasing conditions for the 328-acre property include numerous restrictions to protect wildlife such as big game and raptors. These include no-surface-occupancy requirements in some areas, including within a half-mile of the high-water mark of the river, and the ability to require relocation of wells and other infrastructure in certain other cases to protect other resources.

Hall said the amount fetched by the 448 acres was probably among the top five per-acre yields ever for oil and gas lease auctions in Colorado.

Natural gas development in and around the 12,200-acre Garfield Creek State Wildlife Area has become a recent point of contention. The DOW doesn’t own the area’s mineral rights, and some drilling within the area has begun in order to develop privately owned mineral rights.

The BLM has leased 7,430 acres of federal mineral rights beneath the wildlife area, but is requiring most of that oil and gas to be tapped by drilling directionally from outside the wildlife area or from well pads located above privately owned minerals within the area.

The BLM has deferred leasing more than 1,200 additional acres within the wildlife area because the minerals can’t be accessed by drilling from outside the area.


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