New Mexico sold 16 parcels totaling over 7,500 acres for $58.26 million in its quarterly oil and gas lease sale, the Department of the Interior (DOI) has said.
“This is the third highest value for highest bid/acre for a parcel for BLM [Bureau of Land Management]”, the DOI said in a statement online.
The average high bid per acre was about $86,000 while the average high bid per parcel was around $19.2 million, according to results published on the BLM’s National Fluids Lease Sale System (NFLSS).
“The combined bonus bids and rentals from the leases will be distributed between the federal government and the State of New Mexico”, the DOI added.
“This lease sale is the first conducted under the One Big Beautiful Bill Act, which reset the royalty rate for new federal onshore oil and gas production to a minimum of 12.5 percent, reversing the 16.67 percent rate set by the Biden administration.
“By lowering the federal onshore royalty rate from 16.67 percent to 12.5 percent, President Donald J. Trump’s One Big Beautiful Bill Act reduced the cost of doing business on public lands, making oil and gas development more economically attractive to industry.
“This is expected to spur additional leasing and drilling activity, which in turn supports increased domestic energy production and strengthens U.S. energy security”.
All acres offered for sale were protested but the BLM proceeded to award the full offer, according to NFLSS information.
Out of 56 registered bidders, seven won. Paloma Permian Nominee Corp. bagged five parcels covering over 2,500 acres. AO II Permian LLC got four parcels totaling over 2,000 acres. Federal Abstract Co. and Traverse Exploration LLC each secured two parcels, totaling over 1,400 acres and 160 acres respectively.
Rounding up the winners are Broughton Petroleum Inc. (about 840 acres), Devon Energy Production Co. LP (160 acres) and Raymond Keith Williams (40 acres), each receiving one parcel.
The BLM previously held two lease sales in New Mexico this year, according to NFLSS information.
Last May, three parcels totaling nearly 1,300 acres were sold for nearly $600,000. The winners were Armstrong Energy Corp. (640 acres), R&R Royalty Ltd. (320 acres) and Veer Capital Partners LLC.
Last February, seven parcels totaling over 1,300 acres were sold for nearly $20.7 million. Federal Abstract won two parcels totaling nearly 250 acres. Dudley Land Co. also won two parcels totaling 120 acres. FE Permian Owns I LLC won nearly 650 acres. Avant Operating II LLC and R&R Royalty each won 160 acres.
Each lease lasts at least 10 years and as long as the area continues producing hydrocarbons in paying quantities.
To contact the author, email jov.onsat@rigzone.com
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