North Dakota auction targets Bakken coreTrust Lands May nominations also include Bakken fringe and beyond; Whiting high bidder online for Yellowstone riverbed tract Mike Ellerd For Petroleum News Bakken
On April 10, the Minerals Management Division of the North Dakota Board of University and School Lands’ Department of Trust Lands released nominations for its May 7 oil and gas lease auction. A total of 14,808 acres in 195 separate tracts in 13 western North Dakota counties were nominated for an average of approximately 76 acres per tract (see chart).
The acreages nominated for the May lease auction are in Billings, Bottineau, Bowman, Burke, Dunn, Hettinger, McKenzie, McLean, Mountrail, Renville, Slope, Stark and Ward counties (see charts). The highest nominated acreage is in Mountrail County at 3,349 acres; the lowest is in Renville at 80 acres. The 195 tracts range in size from 160 acres down to a low of 0.07 acre for a Missouri riverbed tract in Dunn County. The highest average acreage per tract is in Billings County at approximately 112 acres per tract. The lowest is in Bottineau at 44 acres per tract.
While most of the nominated acreages are in the core of the Bakken petroleum system, i.e., Burke, Dunn, McKenzie and Mountrail counties, the other nine counties with nominated acreages are either on the fringe of what is generally considered the boundaries of the system or beyond those boundaries. Bowman, Slope, Hettinger, Billings and Stark counties are in the far southwest corner of the state; Renville and Bottineau counties are on the Canadian border in north-central North Dakota; and Ward and McLean counties are farther east near the central region of the state. Slightly over half of the acres nominated in Dunn County are Missouri riverbed tracts.
The May 7 North Dakota Trust Lands lease auction will be held in the House chambers of the North Dakota state capitol building in Bismarck beginning at 9:00 a.m. Central Daylight Time.
10-year perspective The 14,808 acres nominated for the May 7 auction is up from the 10,447 acres that were leased in May 2012, but is well below the 10-year May average of 25,550 acres (see chart). The three highest acreages leased in the May sale over the last 10 years were in 2011, 2010 and 2009 when 61,041, 53,275 and 33,659 acres were leased, respectively.
The May nomination acreage of 14,808 acres is also down from the 27,356 acres that were leased in the February 2013 auction. That total was near the 10-year February average of 30,312 acres. The November lease auction has the highest 10-year average at 39,084 acres. The highest acreage leased in auctions over the last 10 years was 114,298 acres leased in November 2006.
ND’s March online auction In March, Trust Lands offered a 174-acre Yellowstone riverbed tract in McKenzie County for lease through EnergyNet’s online auction service. Whiting Petroleum Corp. nominated the tract and had submitted an application for expenditure or AFE to the Department of Trust Lands to complete its Keykendall 34-31-1H Middle Bakken well under the Yellowstone River just south of the river’s confluence with the Missouri River near the Montana border in far western McKenzie County. Three bidders submitted online bids from March 18 through March 21. Whiting was the successful bidder acquiring the lease for $2,760 per acre.
This was the first online auction that EnergyNet conducted on behalf of North Dakota Trust Lands since August 2012 when EnergyNet auctioned an 80-acre tract in southeastern McKenzie County. North Dakota Trust Lands uses the online auction service when acreages are found within spacing units that were either never leased or had an expired lease and when operators want to proceed with development without having to wait for the next quarterly live auction.
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