Three Wyoming producers — Encana Oil & Gas (USA) Inc., Noble Energy and ConocoPhillips — eventually will seek permission from the Bureau of Land Management (BLM) to drill up to 4,200 natural gas wells over 265,000 acres in the state.
An Encana spokesman told NGI the status of the prospective Moneta Divide project is still preliminary but he confirmed that a BLM filing is expected in the future. The proposed development plan would cover 400 square miles that are mostly managed by BLM.
“It all will be going through the [federal environmental impact statement] EIS process, so this is still the early days,” said the Encana spokesperson. Encana already has its share of the proposed 15-year drilling program carved out, he added. Encana is Wyoming’s largest producer, employing more than 1,100 workers in the state.
Moneta has the potential to deliver “natural gas at economical rates, but we still have a lot to do before we will know what we have.” The dry gas project is characterized as “deep tight sands,” he said.
In an area once known as Frenchy Draw, the latest proposal is an expansion of a project outlined in 2008 in a field where there has been development over the years. Some 500 producing gas wells currently operate in the general area.
“We expanded from the original planned size of the development to accommodate [the federal National Environmental Protection Act] NEPA requirements, so now it is 265,000 acres of which we hold 95,000 acres,” the spokesperson said. Of the 4,200 wells envisioned, Encana would own 3,600 wells. “It is a project that has some potential, but we’re in the early phases right now.”
Gov. Matt Mead said the proposed project “is still early in the process but the potential is impressive, both in terms of jobs created and revenue for Wyoming.”
In related news BLM said it generated a record $49.197 million in leasing rights and rental fees on federal land parcels offered at its quarterly oil and gas lease auction last week. It was the largest dollar amount earned by BLM in Wyoming for a single sale. More than 83,038 acres in 74 parcels were sold, the BLM said. To date this year BLM said it has sold 764 parcels in Wyoming, which have generated more than $174 million in revenue for the federal Treasury.
Bids ranged from the federally mandated minimum of $2/acre to a high bid of $4,500/acre, and successful bidders paid $145/parcel, one-time administrative fees and a yearly rental of $1.50/acre for the first five years the lease is effective, rising to $2/acre in years six through 10. The next BLM sale is scheduled Thursday (Aug. 11) in Denver.
Separately, a BLM spokesperson in Washington, DC, told NGI that producers have rejected waiting for an amendment to the federal agency’s resource management plan (RMP), and thus asked for refunds on previous disputed lease sales in which they were high bidders. A federal judge the end of June ordered the U.S. Interior Department and BLM to make a decision before the end of July. At stake were 47 oil/gas leases dating back to 2006 — 38 in Utah and nine in Wyoming. In this case, the producers finally received government decisions before July 30 on their leases, but the terms turned out to be unacceptable, the BLM spokesperson said.
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