An oil and natural gas lease auction Wednesday by the federal Bureau of Land Management (BLM) in New Mexico garnered $83 million in proceeds for leases in four counties in the southeastern corner of the state. The 31 leases are for 10 years, the BLM said.
The bulk of the leases sold were in Lea County, which is part of renewed drilling interest in the Permian Basin. The other counties were Chavez, Eddy and Guadalupe.
In total, 13,282 acres were leased collectively in the four counties, with Lea accounting for 4,405 acres and $72.4 million in leases. The highest per-acre bid was in Lea County -- $21,000/acre for a 640-acre parcel.
Of the $83 million total proceeds, $39.8 million goes to the state under a revenue-sharing formula in which New Mexico gets 48% while BLM takes the rest. The minimum acceptable bid in the quarterly auction was $2/acre.
Thirty-one parcels were involved in the four counties -- 13 in Lea, 9 in Chavez, 8 in Eddy and 1 in Guadalupe -- according to the BLM announcement on the auction results.
BLM officials in New Mexico characterized the most recent auction as part of the Obama administration's "all-of-the-above" energy strategy.
BLM oil and gas leases are awarded for a period of 10 years and for as long thereafter as there is production in paying quantities.
"The revenue from the sale of these federal leases, as well as the 12.5% royalties collected from the production of those leases, is shared between the federal government and the state of New Mexico," a BLM spokesperson in the state said.
The Mineral Leasing Act of 1920 and the 1987 Federal Onshore Oil and Gas Leasing Reform Act authorize leasing of federal oil and gas resources. The 1987 law requires each BLM state office to conduct oil and gas lease sales on at least a quarterly basis. BLM lease sales are competitive and conducted by oral bidding.