The Colorado division of the Bureau of Land Management will offer 86,599 acres of federal land in an oral oil and gas lease auction on Aug. 9 at the BLM Colorado State Office in Lakewood. The sale includes a total of 109 parcels, including 75 parcels totaling 43,471 acres that are held in split-estate ownership. The BLM said it is notifying the public of the sale 60 days in advance, rather than the legally required 45-day notice. The auction rules call for a $2 per acre minimum bid in bonuses on any parcel plus an administrative fee of $130 per parcel. The buyer will pay the bid price for the right to obtain the federal lease, in addition to a standard $1.50 per acre rental for the first five years and $2.00 per acre thereafter. If and when a lease becomes producing, a royalty of 12.5% will be collected by the federal government. Leases are for a primary term of 10 years and "will continue beyond [their] primary term as long as oil or gas is produced in paying quantities," BLM said. Lynn Rust, Colorado BLM deputy state director, noted that "while energy development on Colorado's federal lands continues to play an important part in meeting our nation's energy needs, our focus is on smart planning and working with industry to use best practices to reduce environmental impacts on public and private lands." The complete list of parcels is available on the Colorado BLM website, http://www.blm.gov/co/st/en/BLM_Programs/oilandgas/leasing.html. Protests for the Aug. 9, oil and gas lease auction are due at the BLM Colorado State Office by 4 p.m. on July 25. The BLM has tentatively scheduled its next lease auction for Nov. 8.
Gillette, WY-based Big Cat Energy said it has successfully tested its aquifer recharge injection device (ARID tool) in a wellbore operated by Williams Production RMT in the Powder River Basin. Big Cat's ARID tool and process moves water from the target coal seam to a shallower, depleted aquifer of similar water quality. The company has received approval to start the permitting process for about 500 of Williams's coalbed methane (CBM) wells in the Powder River Basin. Big Cat said its device enables operators to avoid surface discharge of produced water or the reinjection of water into a separate well since the water never leaves the wellbore. James Kuipers, a Butte, MT-based mineral process engineer who has worked on a number of CBM water issues, told NGI, "What Big Cat is proposing is theoretically very possible although depending upon the formation being drilled, there could be limitations." Kuipers noted that overall it would be ideal if CBM fields could be master-planned before the first hole is drilled. If CBM fields were developed sequentially, there could be a process in place where produced water from future CBM wells could be reinjected into earlier-developed wells. Big Cat's communications director, Bruce Nurse, told NGI that "the company is working with the state [of Wyoming] to try to reduce the time required to obtain a permit from 18 months to approximately two to five weeks."
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