$55K / Acre In The Bakken? August 9, 2024

Locator: 48372B.

BLM - Bakken: link here and link here.

From first link: 

The Bureau of Land Management netted roughly $24 million from an oil and gas sale on public lands in North Dakota and Montana on Tuesday, over the protests of climate organizations.

The oil lease auction was the most lucrative the Biden administration has held in the region this year, but it still fell short of what some drillers wanted to see on the table. It was opposed by several prominent environmental groups who have called on President Joe Biden to end oil sales on public lands because of fossil fuels’ contribution to climate change.

The auction included more than 5,000 acres, with most parcels clustered in the prolific Bakken oil region. A handful of parcels were also offered for auction in northern and southern Montana.

From second link:

The US Bureau of Land Management netted $23.9 million in high bids from its Aug. 6 oil and gas sale on public lands largely in the Bakken oil region of North Dakota.

Ten companies submitted 264 bids on the 4,800 acres, about 87% of the total acreage offered in North Dakota and northern and southern Montana, BLM Montana/Dakota field office said.

Pride Energy Co. entered the single highest bid—$15.1 million—for a 273-acre lease under the Missouri River outside of Williston, ND, according to preliminary sales data released Aug. 7 by the agency. Companies that win a lease in federal oil sales are given 10 years to start drilling for oil and gas. BLM applies a 16.67% rate from production on the leases.

The auction was the most lucrative this year in the region, despite protests by environmental groups, who urged the Biden administration to curb oil and gas leasing on public lands because of fossil fuels’ contribution to climate change. BLM took in a total of $663.5 million in high bids in a similarly sized lease sale in the same region in April. 

Back of the proverbial envelope:

• $15.1 million / 273-acre lease: $55,000 / net mineral acre
• easily compares with what the Permian commands
• small mom-and-pop mineral owners in the Bakken are being offered $3,000 / net mineral acre

• $15.1 million / 273 acres = $55,311 / acre 
• 273 acres = slightly less than 1/2 section 
• sections 16 / 17 / 21 / 22 -- 153 - 93 "available; far west Sanish;
• then almost all of the river west of / and including section 24 / 25 -154 95; Hofflund, Grinnell
  
• speaks volumes about the work left to be done in the Bakken

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More Bakken

WTI: $76.12.

Sunday, August 11, 2024: 22 for the month; 78 for the quarter, 404 for the year
None.

Saturday, August 10, 2024: 22 for the month; 78 for the quarter, 404 for the year
None.

Friday, August 9, 2024: 22 for the month; 78 for the quarter, 404 for the year
40375, conf, Iron Oil Operating, Stocke 6-4-9H,
39603, conf, Hess, BL-Iverson B-155-95-0807H-8,
39252, conf, Hess, SC-4WC-153-98-3130H-4,

RBN Energy: tight US octane supplies can play a role in summer gasoline price spikes.

Some U.S. refiners report lower-than-market gasoline profit margins in the summer, which are often attributed to summer volatility specifications. But that is not always the primary issue; rather, some refiners have trouble generating enough octane-barrels due to the strong demand during the summer months, which can help drive price spikes. In today’s RBN blog we explain why, with a focus on octane, the primary yardstick of gasoline performance, quality and price, and show how refiners use a PIANO analysis to optimize their production.