About $64M in oil, gas leases
MEDORA -- Phones rang, hands feverishly flew in the air and bids climbed higher and higher as oil and gas lease totals amassed about $64 million during a North Dakota State Land Department oil and gas lease auction at the Rough Riders Hotel Conference Center Tuesday.
With about 42,000 total mineral acres auctioned off and a room reeking of money waiting to be spent, McKenzie County tracts fetched the highest total at about $55 million for its approximate 18,000 available mineral acres.
During a similar May sale, McKenzie County raked in the second highest total -- about $43 million.
Money collected from the sales go into the school system to fund kindergarten through 12th-grade education.
Toward the middle of auctioning off McKenzie County tracts, two landmen adamantly tried to outbid each other and ultimately, one ended up bidding $6,500 per acre for an approximate 202-acre tract, totaling about $1.3 million.
The cheapest per-acre bid came in at about $1 to $2 per acre with the highest per-acre bid going in Williams County for $9,250.
A suit-clad, headset wearing Thomas Gray, a field landman and agent for Slawson Exploration Co, Inc., observantly sat in the newly decorated conference center adorned with a paisley print carpet and gold tin ceilings.
While many oil and gas lease brokers will bid on behalf of another person or entity, such is not the case with Gray.
"Now Slawson, the company I work for, we openly announce, 'Hey we're bidding on it,' " Gray said.
Beginning his oil career in Dickinson in 1979, now living in Williston, Gray has seen some changes and things have seemingly only gotten better.
Money spent on leases this go-around, compared to the last oil boom, may be more of a surefire investment.
"One of the things that's interesting about this boom is that every well we drill is a sure deal," Gray said.
But, lease prices were somewhat of a surprise to land officials.
"I think we would all agree that it was just very strange in that stuff that we expected to sell for more sold for less and vise versa," said Linda Fisher, leasing coordinator for the North Dakota State Land Department, which is governed by the Board of University and School Lands. "The final number is pretty reasonable. We figured McKenzie was going to have to carry the weight of the sale."
While exact totals will not be available until today, average totals from sales (held every three months) are:
Billings: $1.1 million
Divide: $2 million
McKenzie: $55 million
Williams: $2.4 million