CHEYENNE, Wyo.—A California resident says he’s organizing an online auction for private mineral leases in Wyoming and Colorado focusing on the Niobrara Shale formation that has previously attracted record sales.
The Casper Star-Tribune reported Sunday that Ben Massion is finalizing plans to hold the auction later this month, which he estimates will include as many as 200,000 acres of private minerals from Wyoming and Colorado. Massion owns mineral interests in southeast Wyoming.
Massion said he’s already been contacted by big and small oil producers and brokers who are interested in participating.
Energy companies have been buying federal, state and private leases amid speculation that the Niobrara Shale could become a significant source of oil. Interest in the Niobrara’s potential has attracted many investors, some of whom have paid more than $3,000 per acre for parcels that sold for $10 per acre a year ago before new drilling was being contemplated.
Companies usually negotiate individually with private mineral rights owners and Massion previously said an auction would help determine what is a fair price.
Massion said he’s talked with private mineral owners who signed lease contracts when the rush began so they could buy new farming equipment and now regret their deals.
“They sold for low prices because they didn’t think their land was worth anything,” Massion told the newspaper.
Although the land is still unproven, the speculation is that the formation underlying Wyoming, northeastern Colorado and western Nebraska could yield large amounts of oil using horizontal drilling and other techniques.
Industry officials have said the Niobrara formation resembles the productive Bakken formation in North Dakota, a state that has weathered the economic downturn largely because of oil.
In August, a state lease auction netted $13.3 million for Wyoming. The state had already held a lease auction in July that brought in $42 million, and a record-setting $46 million auction in May.
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Information from: Casper Star-Tribune – Casper,
