DENVER Buyers bid $22.4 million Thursday at the Colorado State Land Boards quarterly auction for leases on land for oil and gas development, with high bids coming in hot areas of the Niobrara shale formation.
The board doesnt plan to release buyers identities or official revenue from the auction until the bids have been paid.
An August auction drew a record $26.2 million including fees, but the last auction, in November, raised just $4.8 million.
More than 70 buyers showed up to bid on about 120 parcels Thursday. Interest was high due to excitement over the Niobrara shale formation, which is under parts of Colorado, Wyoming, Nebraska and Kansas.
The high bid per acre Thursday was $3,300 for 320 acres in Weld County, in the heart of where the Niobrara play is picking up, said Timothy Kelly, minerals leasing manager for the Colorado State Board of Land Commissioners.
It was a good auction, Kelly said. The schoolchildren appreciate all the business of the oil and gas industry.
The State Land Board manages more than 4 million acres of mineral rights that the federal government granted to Colorado to generate money for schools and other institutions. Some of the money raised Thursday will go toward construction projects at schools.
Northern Colorado has drawn attention from oil and gas developers, especially after EOG Resources Inc. said last year that its Jake well in northern Colorado produced 50,000 barrels of crude oil in the first 90 days.
At the State Land Board auction in August, Alpine Exploration bid a record $4,000 per acre for 480 acres in Weld County.
Most Weld County parcels up for bid Thursday went for hundreds of dollars per acre, but 15 parcels in Park County saw little interest. Ten of them went for the minimum bid which means a buyer pays nothing but the standard first year of rent of $1.50 per acre plus fees.
Kelly wouldnt speculate on the lack of interest.
Citizens groups have voiced opposition to drilling in Park County until more is known about side effects of hydraulic fracturing, in which water and chemicals are pumped underground at high pressure to help release trapped oil and natural gas. Before the auction, the land board withdrew two Park County parcels next to Antero Reservoir, which supplies some of Denvers drinking water.
One winning bidder of several of the tracts that went for the minimum said he bid because it was cheap and in an area that could possibly be developed later. He declined to identify himself.