By Paul Baker, CEN Staff Reporter

DENVER - With an outcome not surprising to industry watchers, the Bureau of Land Management’s Thursday auction of oil and gas leases in Colorado netted a whole lot less than previously expected just a few months before. The total was below the $250,000 level and clearly reflects the declining prices of natural gas. The Denver auction of 11,257 acres came after the BLM and the U.S. Forest Service withdrew most of the 130,000 acres originally intended for sale after environmental groups put the pressure on the agency.

Nevada-based Yates Petroleum Corp. made the highest bid of $80,000 for an 800-acre parcel of land in Routt County.

The sale was a far cry from the auction last August involving 55,000 acreas in the Roan Plateau. That sale netted $114 million, making it the largest in the BLM’s history. BLM spokesman James Sample says Colorado will split the proceeds of today’s sale with the federal government.

Thursday’s sale was also much smaller because the BLM deferred  the leasing of a 907-acre parcel in the headwaters of the Little Snake watershed in Moffat County.  Concerns raised by by Trout Unlimited about possible effects on Colorado River cutthroat trout had their desired effect, at least from TU’s perspective.

The BLM sold leases on 26 parcels offered at its quarterly sale, with no one making the minimum $2-per-acre bid on a 27th parcel. The 11,257 acres sold yielded $248,058, 49 percent of which will go to the state.

Synergy Petroleum Corp., offered the highest per-acre price for an 80-acre parcel in Weld County. Yates Petroleum Corp. offered the highest overall bid, $80,000, for 800 acres in Routt County. A 359-acre parcel north of Rifle went for the minimum $2 per acre.

A BLM spokesman familiar to Colorado Energy News readers, Steven Hall, said it’s hard to speculate on
exactly what factors might have helped depress bid prices Thursday.

Lower energy prices were an obvious reason but another factor might have been the fact that the sale involved a relatively small amount of acreage scattered throughout the state. Less acreage also may offer less chance of hitting drilling sweet spots, Hall said.

The sale was to initially include 120 parcels containing more than 133,000 acres, much of it on national forest land. However, the U.S. Forest Service requested that some parcels be removed because they were within proposed roadless areas and had been made available in error.

The Forest Service later had the BLM defer leasing another 57 parcels comprising more than 66,000 acres, to allow for further study - a move came in response to numerous protests over possible wildlife impacts if drilling occurred.

Wednesday’s deferral of the Moffat County parcel won the praises of Trout Unlimited, with the group saying it reflected “new leadership within the agency.”