Governor Brian Schweitzer has said that the Montana Department of Natural Resource and Conservation’s quarterly oil and gas lease sale held this week produced $7.9 million for K-12 education in Montana, the fourth-highest income from a sale since the 1970s.
A total of 483 tracts of school trust land totaling 201,000 acres were leased in 20 Montana counties. Judith Basin had the largest number of tracts leased with 253, followed by Chouteau and Cascade counties with 43 tracts each. In Roosevelt County, just two tracts were leased, but for a total of $1.9 million.
Last week’s sale was the third of four slated for 2011; those three sales have generated $18.6 million for school funding this year.
The largest revenue-producing lease sale on record took place in September 2008, when 262 tracts were auctioned for a total of $10.9 million, or $89.64 per acre. The two previous sales in 2011 – the first in March, the second in June – placed fourth and fifth on the list of all-time sales, which are ranked by the average bid per acre.
Approximately 2.1 million acres of state-owned Trust Lands are currently under lease for oil or gas exploration, though production only comes from 235,000 acres, which generate $21 million per year in royalties. In general, about one lease of every 10 sold at auction will actually be drilled and developed. Once a tract is leased, the owner has up to 10 years to begin exploration and development. A producing lease can remain in effect for as long as oil or gas production continues.
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