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Vol. 17, No. 52 Week of December 23, 2012
Providing coverage of Bakken oil and gas

Montana lease auctions soften

The Minerals Management division of the Montana Department of Natural Resources and Conservation, DNRC, held its quarterly oil and gas lease auction Dec. 4, selling 6,482 acres in 29 parcels statewide, for a total of $160,147 with an average price per acre of $24.71.

The acreages sold were in the following Montana counties: Carbon (1,346), Carter (640), Golden Valley (640), Lewis and Clark (640), Pondera (640), Richland (1,935) and Teton (640). The highest bid was $230 per acre by H. Kermit Anderson for a 13.5 acre parcel in Richland County. Willis Oil & Gas Inc. had the second highest bid at $220 per acre for 28 acres also in Richland County. Trinity Western Land & Exploration LLC had the third highest bid of $200 per acre for a 39 acre parcel, again in Richland County. The lowest bid was $2 per acre for a 640 parcel in Golden Valley County in central Montana.

In contrast to the December 2012 sale, the December 2011 sold 197,777 acres, although the average price per acre in that sale was less at $17.71. In the March 2012 sale, a total of 115,568 acres were sold with an average price per acre of $30.60. A total of 73,185 acres were sold in the June 2012 sale with an average price per acre of $19.07, and 17,676 acres were sold in the September 2012 sale with an average price of $32.84 per acre.

In a written statement to Petroleum News Bakken, DNRC Minerals Management bureau chief Monte Mason said, “Our last two lease auctions (Sept. 5 and Dec. 4, 2012) were definitely two of our smaller sales. They follow on the heels of about 4 years of very strong leasing activity, where our total acreage under lease increased from 1.94 to 2.55 million acres. Our recent sales reflect the fact that our ownership in the Williston Basin is in play, with literally 99 percent of our Williston Basin acreage currently under lease.”

Sales peaked in 1980

The highest ever grossing Montana DNRC sale was in June 1980 when 435,272 acres were sold in 1,016 parcels for a total of $15,173,584. The average price per acre in that 1980 sale was $34.86. The highest average price was in September 2008 when the DNRC sold 121,881 acres in 262 parcels for a total of $10,925,820 with an average of $89.64 per acre. That September 2008 sale was also the DNRC’s second highest grossing sale.

Mason noted that the majority of the Williston Basin is in North Dakota, “but we are lucky enough to have a piece of its western edge in northeastern Montana. The Elm Coulee field in Richland County has been a great success. Some production is being developed in Roosevelt and Sheridan counties and Apache has a major stake in Daniels County, but the jury is still out on whether another Elm Coulee exists in Montana.”

The next Montana DNRC sale is scheduled for March 5, 2013. Nominations for that sale closed on Dec. 18. The March 5 sale will be held in the Montana Department of Transportation auditorium in Helena beginning at 9 a.m.

—Mike Ellerd


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Upcoming BLM, ND auctions

The Bureau of Land Management’s Montana/Dakotas office has scheduled its next lease auction for Jan. 29 at the Montana BLM office in Billings beginning at 9 a.m. Nominations for the January sale closed May 25.

The Montana/Dakotas BLM office rotates among the three states in the four auctions it holds per year, and the January auction is limited to North Dakota with offerings in Burke, Dunn, McKenzie, Mountrail, Stark and Williams counties. A total of 2,903 acres will be offered in 28 parcels. One 40 acre parcel in Bowman County was initially to be included in the January sale but has since been taken off the block.

The next North Dakota Department of Trust Lands Minerals Management Division lease auction is scheduled for Feb. 5. The nomination period for that sale closed Dec. 14; nominations are being processed and will be available by early January.

—Mike Ellerd