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CHEYENNE — The U.S. Bureau of Land Management auctioned off a record $32.3 million in federal oil and gas rights in Wyoming amid speculation that a major oil play could be in the offing in the eastern part of the state.
Tuesday's quarterly lease sale in Cheyenne broke the previous record of $30 million set in April 2008 and was three times the total paid for all leases in Wyoming last year.
The leases with the highest bids were in Converse, Goshen and Platte counties in eastern and southeastern Wyoming. Applications to the state to drill oil wells have surged in southeastern Wyoming in recent months.
"Obviously the people that are bidding on these acreages have a lot of confidence in the area and think the play is going to be a really great oil play for the state," Bruce Hinchey, president of the Petroleum Association of Wyoming, said Wednesday.
The highest single bid at the BLM auction was $5.4 million for the rights to 1,724 acres in Converse County, northeast of Casper. That also set a record, topping the $4.5 million paid for a single lease in 1999, according to the BLM.
Maurice Brown, of Cheyenne, submitted the record-breaking bid, as well as the winning bid of $1.7 million for the rights to 560 acres in Converse County.
Big Bear Oil & Gas, based in Pleasanton, Texas, won a handful of high-priced leases including $2.2 million for the rights to 1,400 acres in Goshen County northeast of Cheyenne.
"It looks fantastic," said Cindy Mercer, a certified public landman who represented Big Bear at the sale. "The potential appears to be there."
The state has granted companies including EOG Resources Inc. more than two dozen permits in recent months to drill deep, horizontal oil wells into the Niobrara shale formation north of Cheyenne. New drilling technology used in North Dakota's geologically similar — and booming — Bakken formation has led to speculation that a similar boom could happen here.
The Niobrara shale extends beneath western Nebraska and northeastern Colorado, as well as southeastern Wyoming.
When the BLM will issue the leases sold Tuesday is uncertain. The office in Wyoming has issued just 51 out of more than 1,200 leases auctioned off in the past two years.
BLM officials blame the backlog on protests filed by environmental groups, policy changes resulting from the change in presidential administrations, and environmentalist petitions to protect certain species as endangered.
