Lackluster Wyoming lease sale concerns western oil industry

The recent Bureau of Land Management (BLM) lease sale in Wyoming has raised concerns among industry leaders about the future of drilling on public lands in the state. The sale, held on September 25, received a mere four bids on two parcels, covering just 79.38 acres out of the 159 acres offered. The lackluster results yielded only $27,600 in high bids, a disappointing outcome for the oil and gas industry.

Pete Obermueller, president of the Petroleum Association of Wyoming, attributed the poor performance to the Biden administration's handling of recent lease sales, which he described as "a slow and steady strangulation of the industry in Wyoming." Obermueller pointed out that the BLM has been sitting on millions of acres nominated by the industry for development, without providing a clear plan or explanation as to when, or if, these high-value, high-potential acres will be offered for lease.

The terms of the BLM Wyoming lease sale, which include a 16.67% royalty rate for production on new leases, are consistent with the new leasing rules. The revenue generated from the sale will be split between the state and the U.S. Treasury. However, the industry's tepid response to the sale suggests that regulatory uncertainties and the lack of attractive parcels on offer are deterring companies from investing in drilling on Wyoming's public lands.