NM Kicks Off 4th Quarter BLM Lease Sales, Permian Basin Potential Soars In New USGS Estimate
New Mexico’s Bureau of Land Management quarterly oil and gas lease sales this week leads off two weeks of quarterly lease sales in western states that will cap a record-breaking year in generating federal revenues from public land leasing.
BLM New Mexico’s 4th quarter lease results—more than $19 million in lease sales on the first day of a two-day sale concluding today, according to a BLM spokesperson who spoke to Western Wire—comes just three months after a blockbuster quarterly lease sale in September that generated nearly $1 billion in total revenue.
In September, the third-quarter oil and gas lease sale in New Mexico “broke all previous records by grossing nearly $1 billion in bonus bids,” DOI said in a statement. “The two-day sale brought in more revenue than all BLM oil and gas sales in 2017 combined, and surpassed BLM’s previous best sales year.”
The Department of the Interior put the total for the 3rd quarter lease sale at $972,483,619.50 in total proceeds. Nearly half, or forty-eight percent, of the total revenue is shared with New Mexico, while the remainder heads to the U.S. Treasury, DOI officials said.
At least five of the 4th quarter parcels drew five-figure-per-acre bids, according to preliminary results, with the winner of parcel 55, located in Lea County, New Mexico, drawing $35,003 per acres for a 40 acre parcel.
New Mexico’s lease sale kicks off the remaining 4th quarter offerings from Nevada, Montana, Wyoming, Utah, BLM Eastern States, and Colorado, whose lease sales will occur next week.
At 107 parcels and 86,773 acres offered, New Mexico leads in the number of parcels up for sale in December, but Utah will have the most acres available for purchase, at 154,212 acres covering 105 parcels.
EnvergyNet.com will continue to conduct the online lease sales exclusively as it has full time since 2017. The move to online sales for BLM quarterly lease auctions came in the shadow of multiple protests in the years preceding that aimed to disrupt, delay, or prevent mandated lease sales by the bureau.
Opponents of the New Mexico sale showed up yesterday to protest but found the office in Santa Fe closed due to the federal government closure in honor of former President George H.W. Bush on Wednesday.
“We’re here because the U.S. government is our enemy,” the protesters shouted, according to E&E News. “Keep in mind their goal in life is to completely eliminate us.”
New Mexico’s lease sale concludes the same day as a new report of the largest estimated continuous oil and gas resource potential was released by DOI, focusing on the Wolfcamp Shale and Bone Spring Formation in the Delaware Basin, which forms a part of the Permian Basin, spread across southeast New Mexico and neighboring Texas.
Interior officials estimate “46.3 billion barrels of oil, 281 trillion cubic feet of natural gas, and 20 billion barrels of natural gas liquids,” according to an assessment by the U.S. Geological Survey (USGS). This estimate is for continuous (unconventional) oil, and consists of undiscovered, technically recoverable resources,” an agency press release said.
“Christmas came a few weeks early this year,” said U.S. Secretary of the Interior Ryan Zinke in a statement. “American strength flows from American energy, and as it turns out, we have a lot of American energy. Before this assessment came down, I was bullish on oil and gas production in the United States. Now, I know for a fact that American energy dominance is within our grasp as a nation.”
USGS officials pointed to technology as the reason the Permian Basin’s resources, considered unrecoverable in previous decades, are now “viable.”
“In the 1980s, during my time in the petroleum industry, the Permian and similar mature basins were not considered viable for producing large new recoverable resources. Today, thanks to advances in technology, the Permian Basin continues to impress in terms of resource potential. The results of this most recent assessment and that of the Wolfcamp Formation in the Midland Basin in 2016 are our largest continuous oil and gas assessments ever released,” said Dr. Jim Reilly, USGS Director. “Knowing where these resources are located and how much exists is crucial to ensuring both our energy independence and energy dominance.”
Specifically, USGS noted the advancements made by hydraulic fracturing and directional drilling in opening the Permian Basin’s expansive natural resources.
“The results we’ve released today demonstrate the impact that improved technologies such as hydraulic fracturing and directional drilling have had on increasing the estimates of undiscovered, technically recoverable continuous (i.e., unconventional) resources,” said Walter Guidroz, Program Coordinator of the USGS Energy Resources Program.
U.S. Rep. Rob Bishop (R-Utah) and chairman of the House Natural Resources Committee called the USGS announcement a “home run” for the Unites States and “highlights the continued importance Western states will play in the future of our country.”
“The USGS’s latest assessment of the Permian Basin has doubled our nation’s onshore resources and is a homerun for our economy. It is imperative that we continue to promote policies and technology that will allow our nation to harness this undiscovered wealth,” Bishop said in a statement.