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It wasn’t perhaps what it could have been without the pandemic, but the New Mexico oil auction that the Bureau of Land Management held today managed to bring in $3 million.
That’s not too shabby considering the run on oil and gas bankruptcies in the U.S. shale patch.
The average price per acre that the BLM received from the auction this go around was $403 - a far cry from the $4500+ per acre that it has taken in on average during President Trump’s time in office, according to Reuters.
Part of the lack of interest, on top of oil and gas companies being particularly strapped for cash, could be the timing of the presidential election.
President Donald Trump’s Democrat rival, Joe Biden, has promised to ban all fracking on public lands - so at least some oil and gas companies are probably unwilling to spend a lot of money on a lease that they might not be able to develop.
Related: U.S. Oil Production Won’t Reach 13 Million Bpd Any Time Soon
But that didn’t stop everyone.
The top per-acre fee for this auction was $11,353. The low, in contrast, went for an average of $15 per acre.
In August, the BLM held other land auctions for the oil and gas industry after canceling several in the midst of the pandemic.
The BLM also plans to hold land auctions in California in what will be the first such auction in seven years.
It’s hard to estimate just how much money the BLM could have raked in from this week’s auction during better times. It is, however, clear that the BLM could have received much more if oil and gas companies didn’t have depressed oil demand to look forward to, or limited finances to death with.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.