Tuesday, November 27, 2007

Do I Hear $20k An Acre?

Well, it seems that the money from $90 oil has to go somewhere and quite a bit of it, $5.28 million to be precise, went from Sinclair Oil to the federal government at the BLM lease sale today for a 320 acre tract in Mountrail Co. That's a $16,500/acre bonus. This kind of stuff isn't sustainable, if you ask me (and nobody has by the way).

Based on this, I suppose the company is offering private mineral owners, what, about $10K/acre? Actually, probably more a like a couple hundred dollars.

Be sure to see the comments left by Larry and roccojoco for some useful information.

(The article has confusing language so that it may seem like it is referring to a purchase of the mineral rights, but it was a lease and not a purchase).

KTVQ in Billings

and

Minot Daily News (changed from Grand Forks Herald as the link went dead).

4 comments:

Larry said...

Do you know if this 320 acres is this parcel offered by the BLM?

11-07-216 ACQ
NDM 97545
T. 154 N, R. 90 W, 5TH PM, ND
sec. 12 SW;
13 NW;
Mountrail 320.00 AC


This was the only 320 acre parcel offered. There were two 160 acre parcels offered in T155-R91.

If the 320 parcel is in Austin Township, then it seems the drillers have high hopes for big production in that township. EOG already has two big finds in Austin Township and two other wells being drilled.

Anonymous said...

Hey my earlier offer for 10K/acre in killdeer area still stands!

Teegue said...

Larry, it almost certainly is that tract, but I haven't seen the official results.

And Anon, $30 and an 1/8 still seems fair, although that may have to be scaled back some with the recent drop in oil prices. ha.

roccojoco said...

Ha, the feds only have a 50% mineral interest, so it's actually $33,000 an acre!