Weld County rakes in millions for mineral leases
September 3, 2012
Weld County's mineral lease market proved strong and healthy Monday, with another $1.6 million in bids from companies that hope to explore county-owned land for oil and natural gas.
Monday's auction followed a record spring for Weld County in mineral lease bids, which raked in $5.1 million in March.
That's not counting the 20 percent royalty the county receives on oil production or the $1 per acre rental fee, said Jennifer Finch, spokeswoman for Weld County commissioners. The total for bids, royalties and rental fees last year — at $7 million — has already been surpassed by this year's auctions plus royalties. So far this year, the county has garnered $6.8 million from auctions and $2.6 million from royalties, Finch said.
While the county is not required to hold a certain number of auctions, there are normally two each year. Commissioners said earlier this year that the March auction, which awarded 19 land parcels for exploration, may have been so high because there was only one lease auction in 2011.
This year, officials say there may be enough interest from the industry to hold a third auction in November.
Three companies on Monday bid on 13 parcels of land where they could explore for oil and natural gas, ranging from $500 to $1,750 per acre, with one at $2,500 per acre. Illinois-based Ironhorse Resources came away with the lion's share of leases for bid, paying the county a total of $1,326,880. Baseline Minerals bid on two leases at $252,600, and Bonanza Creek bid on one at $100,010.
Eight parcels of land had no bids, Finch said, but she said she could only speculate as to why.
As it has in the past, Finch said the money from mineral lease auctions goes to the county's general fund, where commissioners divvy it up. Last year, all of the revenue made its way to public works for infrastructure projects.