Thursday, May 5, 2011

Results of the May, 2011, North Dakota Lease Auction -- Oil and Natural Gas

Link here to the state site. (See comments: Clear Creek Resources, LLC, is a subsidiary of Chesapeake Energy.)

Link to the state site with results by county.

Also, a summary by the Bismarck Tribune.com (data points, some numbers rounded):
  • Yesterday's (May, 2011) quarterly state auction resulted in $47 million for the state
  • Cumulative > $500 million over the past three years
  • More than 61,000 acres were leased in yesterday's auction; average price $800/acre
  • The average very misleading due to very small bonuses ($12/acre, for example) in many areas
  • Leases sold in four counties outside the state's traditional oil patch: Stutsman, Adams, McHenry, and McIntosh (actually Adams is fairly close; Stutsman is almost as far east as Fargo)
  • Of the 1.2 million acres managed by the state, only 320,000 acres are still unleased
Highlights:
  • Not much was offered by the state that caught investors' attention. [Update: See first comment below: any unleased state land is available; the auction list is determined by what folks are interested in bidding on.]
  • Highest bonus paid: $8,300/acre for 146 acres in Mountrail Country; Larco Resources, LLC
  • Biggest bidder: Larco Resources, LLC
  • Other big bidders: Clear Creek Resources, LLC; Kasmer and Aafedt; Slawson Exploration; Daniels Petroleum; Sierra Resources; Stephens; Liberty; Diamond
  • Hess paid $6,500/acre for several tracts in McKenzie County
  • Cody Oil and Gas Corporation was the notable player in Emmons, McIntosh, and Stutsman counties
  • All tracts in Stark County were picked up by Clear Creek Resources; almost all them for $900/acre
In Mountrail County:
  • Sections 26, 27, 28, 32, 33, 34, and 35 in T153N-R93W received much interest ($7,000 - $8,300/acre). These sections are under the Missouri River and sit in/between the Sanish and the Elm Tree oil fields. 
In McKenzie County:
  • Sections 29, 30 and 32 in T154N-94W were exciting (around $6,500/acre). These three sections are in/near Alkali Creek, Elm Tree, and/or Charlson oil fields.
In Dunn Country:
  • Sections 24, 25, 26, and 27 in T143-N95W brought around $5,500/acre). These sections are in Murphy Creek and in a very active part of the Bakken.

11 comments:

  1. The first bullet might give the impression that the state selects mineral acres to be offered at auction. All mineral acres owned by the state and not currently leased or held by production are available. The acres appearing in an auction are those in which buyers have declared interest.

    Hess342

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  2. I'll update that.

    I thought I saw a schedule released by NDIC sometime ago in which they listed the areas that would be available for leasing in the future. I must have misunderstood that.

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  3. So, as an individual owning mineral rights can I offer them in these auctions?

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  4. I'm not sure I understand your question, but "no, I don't think you can offer your minerals for auction under the state lease auction."

    The state owns the mineral rights (and probably the surface rights) to certain areas of North Dakota (true in all states; just as the federal government owns land -- managed by the BLM). State parks, for instance, would be owned by the state. The land under the Missouri River in North Dakota appears to be owned by the state.

    On a quarterly basis, the state holds an auction of their land/mineral rights. This is the state's assets, and not private assets. So, if you have mineral rights as a private individual you would not sell them / lease them through the state auction.

    If you interested in selling your minerals, put an ad in the local paper. You will get more telephone calls than you would ever want. Smile.

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  5. any idea at all who Clear Creek Resources is? I'm not familiar with the name and I did a quick search around but couldn't find a thing.

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  6. FWIW

    http://www.clearcreek-es.com/index.htm

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  7. Thank you. I was wondering whether to link their website, but you answered the question for me.

    I will also link it under "Other Producers" on the sidebar at the right. Thank you.

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  8. Clear Creek is Chesapeake FYI.

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  9. I did not know that. Thank you. I will add that to my FAQ page for future reference.

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  10. No lease transactions for Williams County? Wonder what the bonus/acre would have been in this county?

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  11. If you go to the link (ND lease sales for May, 2011), you will see that there were four tracts leased in Williams County in May, 2011.

    Bonuses paid were $1,500; $2,500; $3,500; and, $3,500.

    The tracts were about 70, 10, 40, and 80 acres.

    I only posted the highlights, and did not include all sales.

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