Sixteen of 19 oil and gas leases were sold Thursday by the Bureau of Land Management‘s Eastern States division in Springfield, VA, netting more than $65,275. Bonus bids, filing fees, and rental revenue amounting to $47,000 will go to the U.S. Treasury and $18,275 will be shared with the states where the leases are located on lands managed by the BLM. The BLM has responsibility for leasing the federally owned minerals located in the 31 states east of and adjoining the Mississippi River and offers selected parcels at quarterly competitive auctions. Regulations require the bidding to open at $2/acre. Cyberoil Corp. paid $16,320 for a 1709 acre parcel in Johnson County, AK. Its bid of $8/acre was the highest per-acre bid of the auction. Leases are awarded for a term of 10 years and as long thereafter as there is production of oil and gas in paying quantities. The federal government receives a royalty of 12.5% of the value of production. Also, each state government receives a 25% minimum share of the bonus bid and the royalty revenue from each lease issued in that state. The next competitive oil and gas lease sale will be held in March 2004. Visit the web site at www.es.blm.gov for more information about oil and gas lease sales.

Calgary-based Calpine Natural Gas Trust said Friday its 2003 production will average 33 MMcfe/d, weighted 69% to natural gas. The estimate is for the 78-day period from Oct. 15, when the trust began operating, until Dec. 31. The trust said initial assets are performing as expected, with this month’s production averaging 32.5 MMcfe/d. And next year, production from current properties is expected to average between 30-33 MMcfe/d. The trust has hedged 100% of the natural gas production from the initial properties for a minimum price of C$7.35/Mcf with a unit of Calpine Corp. The hedge is for the period Oct. 15, 2003 to April 15, 2004, and was entered into as part of the trust’s initial public offering. The three separate hedging transactions with Canadian chartered banks included a natural gas fixed price contract for C$5.20/gigajoule between April 1 to Oct. 31, 2004 for 6,200 gj/d; a gas collared contract with a minimum price of C$4.75/gj and a maximum price of C$5.85 between April 1 and Oct. 31 for 6,200 gj/d at AECO; and a collared contract with a minimum price of C$5.00/gj and a maximum price of C$6.80/gj between Nov. 1 and March 31, 2005 for 6,100 gj/d at AECO.

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