Bonus bids at the Bureau of Land Management’s Jan. 26 oil and gas lease sale in Billings, Mont., totaled about $8.6 million, with four companies jointly bidding $912,100 for leasing rights on an over 1,300-acre parcel in McKenzie County, a BLM spokesperson said.
The companies were Yates Petroleum Corp., Yates Drilling Co., ABO Petroleum Corp., and Myco Industries, Inc.
Oil and gas leasing is driven by consumer demand and competitive oil and gas lease sales are conducted at least four times per year at BLM’s Montana State Office, according to a BLM press release.
“The Bureau of Land Management has the responsibility for all the minerals that the federal government owns,” said Greg Albright, spokesperson for BLM. “Be they underneath BLM land, Forest Service land and private land. If it’s United States minerals, then the Bureau of Land Management has responsibility for them.”
Albright said companies nominate parcels of federal land they would like to lease.
“Then we, BLM, go through a process that looks at what they have nominated, to make sure it’s available for leasing,” Albright said. “If everything passes, in maybe six months or so, we will offer a parcel for lease, and everything we offer for lease is offered through a competitive bidding process.”
Receipts from federal oil and gas leases are shared with the state or county where the lands are located, according to BLM information.
Frances Olson, McKenzie County auditor, said how the money is divided depends on a variety of factors.
“My understanding is that if that’s the public domain, minerals that have never been in private ownership, a portion of that has to go to the state and then a portion of that comes back to the county,” Olson said. “What makes a difference is how the Forest Service acquired it.”
Olson said the county could see a portion of the money.
“If it indeed is public domain, half of it goes to the state and then half of what the state gets go to the county of origin,” she said.
Albright said he believes the 1,300-acre parcel’s surface in McKenzie County belongs to the U.S. Forest Service.
All leases are issued for a 10-year term, according to a press release.
A minimum bid is $2 per acre, he said.
A call to Yates Petroleum Corp. was not returned Wednesday.
Of the 75 parcels offered during the recent bonus bid process, 59 were in Montana and 16 were in North Dakota; all parcels offered received bids, according to the press release.
— Beth Wischmeyer