BLM auctions 15 oil and gas leases
Cabot Oil and Gas Corp. of Pittsburgh was the most active purchaser of oil-and-gas leases in Nevada during the Bureau of Land Management’s quarterly auction last week.
The company acquired nine of the 15 leases that were auctioned. It acquired each of the properties for the minimum bid of $2 an acre.
The 15 oil leases auctioned by BLM cover 24,575 acres. The agency had offered 44 parcels encompassing 78,307 acres, but 29 drew no interest.
Last week’s lease auction generated bonus bids and lease payments of $92,453.
The highest bid in last week’s auction was $5 an acre for a lease of 1,045 acres in Nye County. Makoil Inc. of Las Vegas offered the winning bid.
The leases are for 10 years with annual rentals of $1.50 per acre for the first five years and $2 an acre after that until production begins.
Once a lease is producing, a royalty of 12.5 percent is charged.
“If you’re going to produce roughly 80,000 ounces (of gold) a year at $800 an ounce … and gold is at $1,900 or $2,000 per ounce, that’s going to create a tremendous amount of cash flow.”