Oil and gas companies snatched up less than 1% of acres offered up in a bonus federal lease sale in Wyoming. But an industry group says that’s not for a lack of interest in drilling.
Of the 26,050 federal acres offered, 160 were bid on at the minimum $10 per acre bid.
“It indicates lack of interest of the companies that are there at that moment and in that particular location at that moment,” said Petroleum Association of Wyoming President Pete Obermueller. “It's not an indication of overall interest in production in Wyoming.”
Obermueller said many of the parcels were in the far northern reaches of Wyoming, which had peak activity in the 2010s.
“There's just not a lot of activity there anymore. It's very much on the fringes of the Powder River Basin,” he said. “Companies that are doing active drilling programs aren't interested in something that's out on the fringes like that. It would take somebody else willing to take a risk to do it.”
The Dec. 30 lease sale was the Bureau of Land Management’s (BLM) second offering of these particular parcels. They were initially made available in the fourth quarter lease sale in early December, but companies passed them up then, too. That triggered the bonus sale, separate from the typical quarterly events, which is required under a new rule passed by Congress this summer.
“What I like about this system now, is the ones that don't get bids get put back in the hopper,” said Obermueller. “People can reevaluate, ‘Do I really want this? I know I'm going to get it a little bit cheaper now, do I think I can drill here and be economical?’ It gives them a second look and a second bite at the apple.”
The more competitive parcels are selling at the typical quarterly sales for sometimes thousands of dollars per acre. Obermueller said that’s because they are in known, high producing areas.
The next scheduled federal oil and gas lease sale is for the first quarter, March 3, with 53 parcels being offered. They span 69,455 acres, primarily clustered in western Carbon County.
While companies are responsible for nominating parcels, the BLM has final say over which ones are actually offered up.
