A total of 29 parcels comprising 35,889 acres in a promising unconventional find in northeastern Nevada were sold to six companies for a total of $1.27 million by the Bureau of Land Management (BLM) during its quarterly oil and gas competitive lease sale held in Reno, NV, the agency said.
Billings, MT-based Lonewolf Exploration and Production Co. made the high bid of the sale: $163,840 ($128/acre) for a 1,280-care parcel in Elko County. Lonewolf also made the high bid per acre when it took a 157.3-acre parcel in Elko County for $152/acre, BLM said.
Leases are for a period of 10 years with annual rentals of $1.50/acre for the first five years and $2/acre after that until production begins, when a royalty of 12.5% will go into effect. Half of the bid and rental receipts are to go to the state.
BLM had offered 35 parcels totaling 45,562 acres in the lease sale. Nearly 41,300 acres that had been nominated for the sale were deferred by the BLM Elko District because those parcels were partially or entirely in Greater Sage-Grouse habitat.
The sage grouse population has been on the decline across the West, and states and other federal agencies have stepped up their efforts to search for a way for development, including oil and natural gas drilling, to coexist with the bird. The Interior Department's U.S. Fish and Wildlife Service said Wednesday that it is extending the public comment period on two proposed rules: to list as endangered the gunnison sage grouse, which is found south of the Colorado River in Colorado and Utah, and to designate 1.7 million acres of critical habitat for the bird under the Endangered Species Act.
In October Noble Energy Inc. said it had paid about $200/acre for 350,000 gross acres in a promising field in northeastern Nevada (see Shale Daily, Oct. 12, 2012). At the time, the Houston-based producer said it held all of the working interest in the play. The acreage held the potential for 1.3 billion boe of gross resources, according to Noble. The depth range is 6,000-12,000 feet, with gross thickness of 1,500-2,000 feet, which are characteristics similar to the neighboring Uinta Basin, as well as Nevada's Railroad Valley, the company said. Noble plans to begin testing vertical wells in the second or third quarter this year.
BLM's next quarterly oil and gas sale, which will feature parcels in the Battle Mountain District, is scheduled to be held June 11.