ND leads 3-state region in oil, gas leases

AP News
Posted: Dec 21, 2009 2:58 PM

Federal oil and gas lease sales in the Dakotas and Montana set a record in fiscal 2009, with parcels in western North Dakota's booming oil patch accounting for the overwhelming bulk of interest, the Bureau of Land Management said Monday.

Oil and gas lease sales in the three states totaled $75.4 million during fiscal 2009, which ended in September, said Greg Albright, a BLM spokesman in Billings, Mont.

North Dakota accounted for $74.2 million in leases, according to the BLM. Montana tallied $1.1 million, down from $2.4 million the year before, and South Dakota fetched about $163,000, up from zero in fiscal 2008.

The three-state region's total for fiscal year 2008 was a then-record $51.4 million, with North Dakota representing $49 million, the BLM said.

Federal oil and gas lease sales drew more interest in North Dakota than in Montana and South Dakota for the sixth straight year, agency records show.

BLM offered 250,987 acres for lease in fiscal 2009, with 212,880 acres leased. Only 1,289 of North Dakota's 103,422 acres offered did not receive bids. Montana had 91,221 acres leased, while South Dakota had 19,529.

Most of the leases in North Dakota were within the rich Bakken shale formation in the western part of the state, Albright said.

"People love the Bakken," Albright said. "It's all market driven."

The Bakken formation encompasses some 25,000 square miles within the Williston Basin in North Dakota and Montana. The U.S. Geological Survey has called it the largest continuous oil accumulation it ever has assessed.

Revenues from the oil and gas leases are shared by the federal government and the state or county where the parcels are located, the BLM said. The leases are for 10 years but can be extended or shortened depending on production, Albright said.

Oil and gas lease sales in the three states during fiscal 2007 totaled $11.4 million, with North Dakota accounting for $9.3 million. Montana had $1.6 million in leases that year, while South Dakota tallied $487,589.

The first BLM oil and gas lease sale in fiscal 2010 fetched $21.6 million, the BLM said. Slawson Exploration Co. Inc., of Wichita, Kan., submitted a $11.1 million bid for leasing rights on a 1,710-acre parcel in North Dakota's Mountrail County, in the heart of the state's oil patch.