Updated by Staff

LATEST LEASE SALE RESULTS

A Mesa County parcel received the highest per-acre bid at Thursday’s BLM quarterly oil and gas lease sale. Denver-based Axia Energy bid $1,090 per acre for 157 acres north of Collbran. The highest total amount bid on any parcel was $501,380, or $212 an acre, by Lonetree Energy of Denver, for 2,364 acres in the Kimball Creek area in western Garfield County northwest of De Beque.

All 14 parcels offered by the Bureau of Land Management were sold, consisting of 9,769 acres which generated $2,038,560, or an average of $207 per acre. Colorado gets forty-nine percent of those proceeds, with the rest going to the federal government.

The BLM originally was offering more than 12,000 acres, but that amount was reduced because of public protests or questions raised during internal review by the agency. The BLM ’s Grand Junction Field Office deferred leasing on several parcels in the De Beque area to further consult with the U.S. Fish and Wildlife Service regarding protection of the Colorado hookless cactus, federally designated as a threatened species.

Among the buyers:

Baseline Minerals Inc., a Denver company that leases minerals on behalf of other clients, acquired a 670-acre parcel west of Paonia Reservoir in Gunnison County for $170 an acre, and a nearby, 120-acre parcel for $150 an acre. Genesis Gas and Oil Colorado LLC of Kansas City ponied up $115 an acre for two, 1,278-acre parcels in northwestern Rio Blanco County. Contex Energy Co. of Denver paid $280 an acre for 1,440 acres in the north-central part of the county. And Robert L. Bayless, Producer, LLC, of Denver won a 60-acre parcel for $12 an acre and a 573-acre parcel for $22 an acre on the county’s western border.

PICEANCE BASIN UPDATE

 The plateau near Rifle now has 35 drilling regs operation and the state of Colorado says it will issue a total of 6,500 permits for statewide drilling this year, the second most-issued by the state during any year, according to officials.

“We continue to have a pretty consistent high level of activity at this point,” Thom Kerr, permitting manager for the Colorado Oil and Gas Conservation Commission, said Thursday during a meeting of the commission. Colorado now has 66 rigs operating statewide, more than neighboring states, noted COGCC Commission Director David Neslin. 

Still, while that figure is encouraging,  Commissioner Mark Cutright said Colorado’s recovery is the most stunted of those in the intermountain states. “I don’t want to paint a rosy picture for the oil and gas industry,” Cutright said. “There’s been layoffs that have been extreme in the state, and companies still have not recovered.”

Williams is the most active natural gas driller in the Piceance Basin, operating a dozen rigs, followed by EnCana’s with seven.

Overall, the rig count is the highest it has been since the second quarter of 2009, when an average of 46 rigs were operating, but well below the average 87 that were drilling in the basin in the first quarter of 2009, according to the COGCC.

COUNTY LEADERS

Garfield and Weld counties lead the state with “extremely high levels of activity. So far this year, Garfield County leads the state with 1,327 drill permits, and Weld County follows with 1,206. The state has issued 222 permits in Mesa County.

Kerr noted there are 4,355 active permits that have yet to be drilled but have not expired. He said those permits provide “plenty of opportunities.”

WIDER AND DEEPER

88 percent of  wells in the Piceance Basin are direction, according to COGCC, 12 percent vertical.  A sizable percentage are also going deep, with 38 percent drilling down for gas at 10,000 to 15,000 feet. A little more than one-third, 35 percent, are 8,000 feet to 10,000 feet deep, and 26 percent go only as deep as 8,000 feet, Mathies said.