Montana sale sets recordNorthern Oil bids $1,110 per acre on...

Montana sale sets record

Northern Oil bids $1,110 per acre on 480-acre tract in Roosevelt County

Mike Ellerd For Petroleum News Bakken

A near record low in total acres offered and a relatively high bid on a sizeable tract combined to set a record high average price per acre in the September Montana Department of Natural Resources and Conservation, DNRC, oil and gas lease auction held in Helena on Sept. 4.

Only 5,254 acres were offered in the Sept. 4 auction, one of the lowest acreage auctions in the DNRC’s history and significantly below the five-year average of 77,853.85 acres (see chart). But the $1,110 Northern Oil and Gas of Wayzata, Minn., offered for a 480-acre tract in Roosevelt County in northeastern Montana, while not even close to a DNRC record high bid, was enough to drive the auction average to the record $106.99 per acre. The previous record average was $89.64 per acre set in the DNRC’s September 2008 lease auction.

The 10-year leases on the 5,254 acres were split among 12 tracts for an average of 437.83 acres per tract, above the five-year average of 406.56 acres per tract. The total of 12 tracts is far below the five-year average of 194.05 tracts. The leases brought in a total of $562,120.00, also far below the five-year average of $2,465,111.66.

Successful bidders and other results
The Roosevelt County tract was the only lease that Northern Oil and Gas picked up at the auction, but there were three other successful bidders. Trinity Western Land and Exploration LLC of St. Paul, Minn., picked up five of the 12 tracts. Two of those are Yellowstone River riverbed tracts in Yellowstone County and another is a Yellowstone River riverbed tract in Richland County.

The two Yellowstone County riverbed tracts totaled 110 acres and brought a total of $200 for an average of $1.82 per acre. The Richland County riverbed tract is 24 acres and brought $160 per acre, the second highest price per acre in the auction.

Trinity also picked up a 640-acre tract in Big Horn County for $17 per acre, and a 640-acre tract in Blaine County in north-central Montana for $1.75 per acre.

Brisco Petroleum LLC of Sheridan, Wyo., paid a total of $10,880 for five 640-acre tracts in Big Horn County in south-central Montana for an average of $3.40 per acre. Brisco’s successful bids ranged from $1.50 to $11 per acre.

The remaining tract, 160-acres in Blaine County in north-central Montana, went to Comet Ridge Montana LLC of Denver for $15 per acre.

“Obviously, Roosevelt County is extremely strong, but a broader interest in leasing and exploration is certainly lacking,” said Minerals Management Division Bureau Chief Monte Mason of the September lease auction results.

The next DNRC auction is scheduled for Dec. 3 beginning at 9 a.m. Mountain Standard Time, and will be held in the Montana Department of Transportation auditorium in Helena. Nominations for that auction close on Sept. 17.