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Federal, state government make $11.4M in mineral rights auction

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Federal, state government make $11.4M in mineral rights auction
Dickinson North Dakota 1815 1st Street West 58602

The state of North Dakota and the federal government on Wednesday cashed in for more than $11.4 million after a mineral rights auction of nearly 3,000 acres in the Oil Patch.

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One of several similar auctions that occur throughout the year, Wednesday's sale released the mineral rights to 2,831 acres in North Dakota. Of the 25 federal leases auctioned off, the highest single-parcel location went to Slawson Exploration Co. out of Wichita, Kan., which took home the rights to 80 acres located in Mountrail County for nearly $1.6 million ($19,500 per acre).

"BLM Montana/Dakotas manages only 58,000 surface acres of public land in North Dakota," said BLM chief of communications Melodie Lloyd. "But the BLM has oil and gas management responsibilities for (1.4 million) federal subsurface and 522,000 lease Indian Trust subsurface acres in the state."

Of the $11.4 million generated from the sale, North Dakota will receive 48 percent of the sum, equating to about $5.5 million, while the federal government will collect the remaining 52 percent. Both entities also will continue to collect on a 12.5 percent cut from royalties from the development of the leases.

"There are four of these auctions per year," said Brad Purdy of the BLM. "This latest one actually netted less than what we usually see. We also have auctions coming up this year in May, July and October."

BLM oil and gas leases are awarded for a period of 10 years and for as long thereafter as there is production in paying quantities, according to a BLM release. For the fiscal year 2012, leases for oil, gas, coal and natural gas liquids paid out close to $139 million to the federal government and the state of North Dakota.

The BLM lands -- which include U.S. Forest Service, split-estate (private surface, but federal subsurface), Indian Trust, among other agencies -- equate to about 9 percent of the land under exploration in the Bakken. The other 91 percent of Bakken lands are under the jurisdiction of the state.

Thanks in part to the development of the Bakken play, the U.S. currently is importing less than 50 percent of the oil consumed nationwide, according to BLM statistics. Those same statistics also show that the price drilling companies are willing to pay for onshore parcels has more than tripled in the past three years, roughly the time period when the Bakken began to explode on the scene.

Wednesday's auction took place in Billings, Mont. The BLM manages more than 245 million acres of public land in the U.S.

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Bryan Horwath
A Wisconsin native, Horwath has been covering news in the Oil Patch of North Dakota since 2012. Horwath currently serves as the senior agriculture and political reporter for The Dickinson Press and, despite the team's tendency to always let him down, remains a diehard Minnesota Vikings fan.
(701) 456-1207
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