Nick Snow
Washington Correspondent
WASHINGTON, DC, Aug. 16 -- The US Bureau of Land Management's Utah office, which expected to have significantly greater interest in its Aug. 15 oil and gas lease sale than a year earlier, leased 86% more parcels covering 92% more acres after rejecting several nominations and deferring others.
"Each nominated parcel is scrutinized to determine if leasing can be done without significant environmental impact. In a typical oil and gas lease sale, about half of the parcels nominated by industry are not offered for lease because of these considerations," explained Henri Bisson, who directs BLM activities in Utah.
The Department of the Interior agency's Utah office deferred offering parcels totaling about 20,000 acres in its Price, Richfield, and Moab field offices in response to an Aug. 2 federal court decision and order. In a lawsuit brought by the Southern Utah Wilderness Alliance, US District Judge Dale A. Kimball ruled at the time that the state office did not follow National Environmental Policy Act procedures in issuing 16 leases following a November 2003 sale.
BLM said it is suspending the leases, adding that no surface disturbing activities have occurred on them and none have drilling permit applications at this time.
Utah's BLM office originally planned to offer 334,000 acres, much of which was in historically nonproducing areas in the state's central region, where interest has grown since a 2004 wildcat discovery near Richfield. Since that discovery, the agency has leased nearly a million acres in its Central Utah field offices.
Nearly half of the parcels it planned to offer on Aug. 15 were in its Cedar City field office, which has seen little oil and gas development. The area is part of a central Overthrust belt with geology that makes it more difficult to pinpoint oil and gas deposit, Utah's BLM office said.
At the latest sale, it leased 154 parcels totaling 226,471.58 acres out of 200 parcels totaling 316,231.18 acres that it offered. On Aug. 16, 2005, it leased all 83 tracts totaling 118,035.9 acres. Leases in the latest sale averaged $51,952.35/parcel and $35.33/acre, down from $106,322.33/parcel and $74.46/acre a year earlier.
High bids
Salt Lake City-based Landgroup submitted the high bid for a single parcel, $578,160, for 2,408 acres in Carbon County. Marion Energy Inc. of McKinney, Tex., submitted the highest per acre bid, $475/acre, for 280 acres in Carbon County.
The 46 parcels that did not receive competitive bids were opened for noncompetitive sale for 2 years starting Aug. 16.
Activity was mixed in two other state BLM offices earlier in the month as Wyoming leased more parcels and acres than a year earlier and Colorado's totals declined year-to-year.
BLM's Colorado office sold 118 of the 158 parcels it offered at its latest quarterly oil and gas lease sale on Aug. 10. The sale, which earned more than $4.8 million in proceeds, leased about 139,555 of the 169,194 acres that were offered.
That compared with 79 parcels (71,589 acres) out of 85 parcels (77,546 acres) sold for nearly $10.1 million on Aug. 11, 2005.
On Aug. 1, Wyoming's BLM office leased 196 parcels, comprising 147,429 acres, for nearly $6.2 million of the 207 parcels (154,385 acres) it offered.
That compared with 185 parcels (203,646 acres) leased for nearly $4.8 million out of 188 parcels (205,978 acres), which it offered on Aug. 3, 2005.
BLM also administers mineral leasing on other federal lands. At the Aug. 10 auction, its Colorado office leased US Forest Service parcels (21,787 acres) of 22 parcels (25,942 acres) that were nominated. The Wyoming BLM office sold 10 parcels in the Bridger-Teton National Forest for $905,852 on Aug. 1 for the Forest Service.
Contact Nick Snow at [email protected].
