ND sale draws robust bidsTrust Lands auction price per acre averaged $1,997 on 9,421 acres; 4th highest Mike Ellerd For Petroleum News Bakken
The North Dakota Department of Trust Lands Minerals Management Division brought in just over $18.9 million in its November oil and gas lease auction, selling leases on 9,421 acres in 100 separate parcels in nine western North Dakota counties, for an average of approximately $1,998 per acre. The sale prices at the November auction ranged from a low of $25 per acre to a high of $15,300 per acre. Slightly over half of the acreage sold was in McKenzie County.
The average price of $1,998 per acre was the fourth highest auction average going back to 1970. The highest average price per acre was $3,526 set at the November 2011 auction, followed by $2,968 in May 2010, and $2,090 in February 2011.
In August, the Minerals Management Division sold a total of 16,665 acres at an average price per acre of $701 per acre. In May it sold 10,447 acres at an average price per acre of $1,000, and in February the total acreage sold was 69,942 with an average price per acre of $1,219.
“We were pleased with the sale,” Minerals Management Division Director Dew Combs told Petroleum News Bakken. Combs said the acreage available for the lease auctions in what he referred to as the “proven area” is decreasing, and that, he said, might be reflected in the higher prices.
Top price by Diamond Resources The top price of $15,300 per acre in the November 2012 auction was paid by Diamond Resources of Williston for a 5.03 acre parcel in McKenzie County. Diamond Resources was also the high acreage buyer, successfully bidding on a total of 3,783 acres in Billings (77), Burke (1,083), Dunn (eight) and McKenzie (2,615) counties. The average price per acre paid by Diamond Resources was $1,050 in Billings County, $237 in Burke County, $1,100 in Dunn County, and $5,968 in McKenzie County.
Denver-based QEP Energy purchased two parcels totaling 214 acres in McKenzie County for $8,000 per acre. Black Ridge Oil and Gas of Minnetonka, Minn., paid $1,800 per acre for 80 acres in Mountrail County, and also purchased a total 160 acres in Mountrail County at $1,800 per acre, and 160 acres in Burke County with an average of $206 per acre.
Other successful bidders at the November auction: Houston-based Hess Corp. (20 acres in McKenzie County at $4,100 per acre); American Land Services LLC of Bismarck (six acres in McKenzie County at $1,300 per acre); LSM Energy Inc. of Mandan (eight acres in Billings County with an average of $1,250 per acre); Empire Oil Co. Williston (971 acres in Billings County with an average of $509 per acre); Northern Energy Corp. of Bismarck (480 acres in Burke County at $25 per acre, 160 acres in Dunn County with an average of $157 per acre, 80 acres in Mountrail County at $500 per acre, and 160 acres in Stark County at $125 per acre); Gary Warnke dba Warco Oil Co. (120 acres in Bowman County with an average of $475 per acre); White Butte Resources of Bismarck (1,919 acres in McKenzie County with an average of $82 per acre); Great Northern Energy LLC of Bismarck (780 acres in Bowman County with an average of $49 per acre); and H. Kermit Anderson and/or Rebecca Ann Hilton Anderson of Ronan, Mont. (80 acres in Bowman County with an average of $55 per acre, 160 acres in Renville County at $36 per acre, and 80 acres in Ward County at $26 per acre).
Next auction in February The Minerals Management Division is currently accepting nominations for the next lease auction, which is tentatively scheduled for Feb. 5. The nominations deadline is Dec. 14. The location for the February auction has not yet been determined.
Combs told Petroleum News Bakken that he has a few holdover parcels from the November auction that will be available at the February auction, but otherwise he doesn’t know what to expect in terms of nominations for the February sale. However, he said he typically doesn’t see many nominations this far in advance of an auction, and most nominations are received in the last two days of the nomination period.
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