Oil leases down, revenues up

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Federal oil and natural gas leasing was down significantly in the Rockies during this fiscal year, according to reports from the Western Energy Alliance.

Lease parcels declined by 70 percent, acreage by 81 percent and revenue by 44 percent since 2008. The only exception is North Dakota, which is experiencing a leasing boom in the Bakken oil formation. Leasing revenue was up 112 percent to $104 million. Although Montana lease acreage was down 58 percent, revenue was up 119 percent. Wyoming’s Bureau of Land Management held its most profitable sales in history, generating $49 million in August, although overall revenue was down 33 percent.

“The Bakken and Niobara formations are contributing lease revenues that help to reduce government deficits today, which holding the promise of future development and production,” said Kathleen Sgamma, director of government and public affairs. “High value lease sales in these areas indicate industry interest, and the potential for significant new government revenue. Now that BLM has worked through its new leasing policies, we hope it will offer sufficient acreage in 2012 to more closely align with industry interest.”

Despite some positive news, overall leasing was down significantly. In Colorado, only four parcels were available for lease. In Utah, that number was 17.

“These numbers clearly show there is interest in producing from public lands in the Rockies, but the government is constraining access,” said Sgamma. “Without access to public lands, oil and natural gas companies will not be able to achieve the full job and economic growth potential of the west.”

Sgamma believes that oil and natural gas deposits in the American West can replace imports from Russia, Iraq, Kuwait and Saudi Arabia.