Anadarko, SITLA defer southern Book Cliffs activity until 2016

Oil and gas activity in the Bogart Canyon area of Utah’s Book Cliffs will be delayed until 2016, Anadarko Petroleum Corp. and the state’s School and Institutional Lands Trust Administration jointly announced on Sept. 16.

Anadarko and SITLA reached the agreement a day earlier in meetings with Utah’s Gov. Gary R. Herbert and US Rep. Rob Bishop, who represents the state’s first congressional district. The two Republicans, who normally support oil and gas development, had expressed concern because Anadarko’s 96,000-acre option included Bogart Canyon, a 17,000-acre roadless area hunters and wildlife groups prize.

“We are pleased a mutually beneficial agreement could be reached,” Herbert said on Sept. 16. “By being willing to listen and respond to stakeholder concerns, Anadarko is once again demonstrating it is a responsible corporate citizen and one of the more socially conscious energy producers in the nation.”

Bishop added, “We also appreciate the cooperative approach taken by SITLA. Providing time to work out a broader lands initiative through a more inclusive and balanced approach is a win-win for all Utahns, especially Utah’s school children.”

SITLA Board Chairman Steve Ostler also expressed satisfaction with the agreement, saying it benefits the state and its public school while honoring the school lands trust’s commitment to Anadarko.

Under the agreement, the initial contract remains largely intact, allowing for oil and gas exploration on three large school trust parcels in the Book Cliffs area of Uintah and Grand counties. Activity will be delayed only on the Bogart Canyon parcel, which essentially is in line with Anadarko’s plan to begin initial exploration in northern parts of its Book Cliffs option area and work southward over time.

SITLA’s plans

SITLA’s board of trustees intends to consider the proposed modification at its Sept. 26 meeting in St. George, Utah, where public comments will be welcome. The board also intends to create an advisory committee to provide input on appropriate wildlife management and mitigation considerations associated with the exploratory lease activities.

SITLA and Anadarko jointly said the 27-month delay would let them consider potential alternatives for the land in connection with Bishop’s broader public lands initiative to potentially consolidate trust lands in energy rich areas in exchange for protecting some of Utah’s iconic and sensitive landscapes.

The southern Book Cliffs have only become a popular hunting area in the last 20 years, SITLA Deputy Director Kim Christy said in a phone interview. Five oil and gas wells were drilled and abandoned there in the late 1970s and early 1980s, he told OGJ. SITLA gets 65% of its revenue from oil and gas activity on land it manages, Christy said.

Utah formed the school lands trust in 1994 to manage 3.4 million acres of land Congress granted Utah to support K-12 public schools and other public institutions when it became a state in 1896. Revenue from school trust lands is deposited in the Permanent School Fund, a $1.64 billion perpetual endowment that distributes interest and dividend income annually to each K-12 school in the state. The 2013 distribution was $37.8 million.

Contact Nick Snow at nicks@pennwell.com.

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