‘A buyer’s market’NDTL lease nominations centered in, beyond outlying reaches of Bakken system Mike Ellerd Petroleum News Bakken
Even though crude oil prices continue a downward slide, nominations for the February North Dakota Trust Lands oil and gas lease auction are robust with 20,752 acres nominated for the agency’s February lease auction, up from the 12,166 acres leased in the agency’s November auction. And keeping with the trend over the last year, virtually all of the acres are on the fringe of the Bakken petroleum system - and beyond.
The nominations came as no surprise to Drew Combs, Director of Trust Lands’ Minerals Management Division, both in terms of where the nominated acres are as well as the number of acres. “We’re running out of open dirt,” Combs told Petroleum News Bakken. “There’s no expired leases, the core’s held by production and lease terms haven’t expired.”
And regarding the number of acres nominated amid a depressed crude oil market, Combs believes companies are seeing opportunity. “People are getting in because they think they can get the leases cheaper,” Combs said. “They don’t seem to be gun-shy. It’s a buyer’s market.”
The focus on state oil and gas leasing in North Dakota has been shifting to the more outlying regions of the Bakken Petroleum System - and even beyond. In recent years, fewer and fewer tracts were available in the core areas, and that trend is clearly seen in the nominations for Department of Trust Lands February auction. While over a third of the 20,752 acres nominated for Department of Trust Lands February auction are in Dunn, McKenzie, Mountrail and Williams counties, those tracts are outside of the deep, thermally mature core area where those four counties converge. Of the remaining two-thirds of the nominated acreage, most lies along the fringe of the Bakken system in Burke, Bottineau, Divide and Stark counties (see map and table). And just over 2,700 of the nominated acres are on the Standing Rock Indian Reservation in Sioux County near the South Dakota border in far south-central North Dakota.
Stark County had the highest number of nominated acres at 3,991, concentrated in the central and east-central area of the county (see map). Dunn County had the second highest number of nominated acres at 3,665, clustered in the far southeast corner of the county. A total of 3,219 acres were nominated in Divide County, and in addition to the 2,717 acres in Sioux County, 2,610 acres were nominated in Mountrail County, 2, 284 in Burke County, 1,308 in Bottineau, 880 in McKenzie and 80 in Williams.
The auction will be held at the Kelly Inn in Bismarck on Feb. 3 beginning at 9 a.m. Central Standard Time. Details on the nominations are available on the Minerals Management Division’s website at https://land.nd.gov/minerals/oilandgasleasing.aspx.
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