Shale Daily / NGI All News Access

BLM Nets $49.8M from Dakotas Lease Auction

Continuing to fetch higher per-acre prices, the federal Bureau of Land Management (BLM) took in $49.8 million last Wednesday, selling 87 leases totaling 19,015 acres in North and South Dakota, the BLM Billings, MT, office said. South Dakota had the most activity.

Fifty of the 87 leases auctioned were in South Dakota, totaling more than 14,000 acres, although officials are not ready to declare that this state is going to rival its neighbor to the north. The highest bids offered were still in North Dakota, where oil/gas production continues to set records (see Shale Daily, July 16).

"The price drillers are willing to pay for onshore parcels has more than tripled in the past three years, compared to the last 25 years," said a Billings-based BLM spokesperson, noting that prices have averaged $55/acre since 1988, compared with $210/acre during the past three years.

A major player in the Bakken, Oklahoma-based Continental Resources Inc. submitted the highest per-acre bid at $33,000/acre for a 28.75-acre parcel in McKenzie County in North Dakota in Wednesday's auction, BLM said. Continental also submitted the highest single parcel bid of $6.8 million for 400 acres in Mountrail County, ND.

Bonus bids totaled $3.3 million with Virginia-based Serka Services LLC submitting the highest single-parcel bid at $880,000 for an 80-acre U.S. Forest Service parcel in Billings County, ND. Serka also submitted the highest per-acre bid of $11,000/acre on the same parcel.

BLM awards leases for 10-year periods, and for as long thereafter as there is production in economic quantities. Potential environmental effects for the exploration/production activity is analyzed prior to the auction.

Five more lease sales for parcels in North Dakota, South Dakota and/or Montana have been scheduled by BLM between October 2013 and October 2014.

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