Acreage

Exploration and production companies are looking to the Marcellus Shale and seeing dollar signs; so are Pennsylvania landowners whose acreage sits atop the shale and its gas reserves.

Exploration and production companies are looking to the Marcellus Shale and seeing dollar signs; so are Pennsylvania landowners whose acreage sits atop the shale and its gas reserves.

Linn Energy LLC has agreed to sell some Oklahoma acreage now producing about 12 MMcfe/d to Warburg Pincus-backed Laredo Petroleum Inc. for $185 million in cash. Linn Energy would retain the option to participate in future production.

The Bureau of Land Management (BLM) has put on hold its plans to offer acreage in the east-central part of the state for oil and natural gas leasing later this month. The Interior Department agency has deferred leasing on 73,000 acres primarily in McCone and Garfield counties, which were scheduled to be auctioned on July 31. The area includes the winter habitat for the sage grouse, said BLM spokesman Greg Albright, who added that the agency wants to make sure that protections are adequate before it leases land to the oil and gas industry. The BLM’s action also is in response to strong opposition from conservation groups, environmentalists and state officials, who claim that leasing would harm the habitat and damage the environment. These groups have protested the BLM’s last three sales, Albright told NGI. Opinions conflict on how the sage grouse has been faring ( see NGI, July 16; see related story this issue). The BLM still plans to auction 195 parcels, covering 263,000 acres, to producers later this month, he said.

The Bureau of Land Management (BLM) has put on hold its plans to offer acreage in the east-central part of the state for oil and natural gas leasing later this month.

“The industry’s acreage land grab of the last five years is largely over. Virtually every conventional and unconventional gas resource play in the U.S. is totally locked up. The winners for the next 10 to 20 years have already been chosen and the losers will pay the price for years to come for being left behind.”

“The industry’s acreage land grab of the last five years is largely over. Virtually every conventional and unconventional gas resource play in the U.S. is totally locked up. The winners for the next 10 to 20 years have already been chosen and the losers will pay the price for years to come for being left behind.”

House Republicans from Pennsylvania on Wednesday criticized the Interior Department’s proposed fall 2007 time table for leasing additional acreage in the natural gas-prone offshore area known as Lease 181 in the eastern Gulf of Mexico.

The Minerals Management Service (MMS) released a proposed notice for Central Gulf Lease Sale 198 on Tuesday, estimating potential production from the acreage of 276-654 million bbl of oil and 1.59-3.3 Tcf of gas. The lease sale, which is scheduled for March 15, 2006, will encompass about 4,000 unleased blocks covering 21 million acres in the Central Gulf of Mexico Outer Continental Shelf planning area offshore Louisiana, Mississippi and Alabama. Recently revised special provisions for the sale include the following: Deepwater royalty relief lease terms specified in the Energy Policy Act of 2005; Shallow-water deep-gas royalty relief for leases in water depths of zero to less than 400 meters (relief in the recent Western Gulf sale was in the zero to less than 200 meter range). In addition, this sale will provide an increase in the royalty suspension volumes from 25 BCF to 35 BCF for successful shallow-water wells drilled 20,000 feet or deeper; This will be the first Central Gulf sale with the higher rental rates that were implemented in August 2005; A newly developed stipulation regarding limitations on use of the seabed and water column in Mississippi Canyon Block 118 because of an ongoing federally funded University of Mississippi study of gas hydrates; A new Information to Lessee (ITL) clause that relates to ongoing U.S. Coast Guard reviews of the Gulf Landing LNG project; and an earlier time deadline for Electronic Fund Transfer (EFT) rental payments associated with this sale.