Industry ‘concerned’ after lackluster Wyoming lease sale

The U.S. Bureau of Land Management (BLM) received only four offers on two parcels during its Sept. 25 lease sale in Wyoming, leaving industry executives concerned about the future of the drilling on public lands in this region.

Pete Obermueller, president of the Petroleum Association of Wyoming, told the Oil & Gas Journal on September 27 that the Biden administration’s handling of recent lease sales amounts to “a slow and steady strangulation of the industry in Wyoming.” .

Offers received at the lease sale covered 79.38 acres, only half of what was offered. Obermuller noted that the lackluster sale was not surprising since BLM’s recent lease sale offered only “159 acres of non-contiguous marginal parcels that do absolutely nothing to facilitate horizontal drilling in the Powder River Basin.”

The lease sale brought in $27.6 million in high bids.

Obermueller said Wyoming’s oil and gas industry has designated millions of “high-value, high-potential acres” for development that “they are willing to lease right now from the BLM.” The BLM is sitting on all of these acres with no plan or explanation as to if or when they will be offered for lease.

The terms of the BLM Wyoming lease sale comply with the new leasing rules and include a 16.67% production royalty rate on any new lease. Revenues are shared between the state and the US Treasury.