HELENA, Mont. — The Montana State Board of Land Commissioners has approved an oil and gas lease sale expected to generate more than $2.1 million for state trust lands, with the proceeds benefiting public education.
The sale included 12 tracts in Musselshell, Sheridan and Toole counties. A single tract in Sheridan County generated a $2.14 million high bid, according to the governor’s office.
Gov. Greg Gianforte said the sale reflects both Montana’s role as an energy-producing state and the value of state trust lands as a funding source for schools.
“Montana provides key energy resources to make our state and nation energy independent and secure,” Gianforte said. “The funding generated by this sale represents a sustaining investment in Montana’s public schools to ensure our kids have access to the best education possible.”
The Montana Department of Natural Resources and Conservation said advances in horizontal drilling have increased industry interest in areas that previously may not have been considered economical to develop.
DNRC Director Amanda Kaster said those technological changes are contributing to higher lease-sale values and increased revenue for state trust beneficiaries.
Oil and gas leases on state trust lands include an annual per-acre leasing fee and a one-time competitive bonus bid. If a leased tract is later developed and begins producing oil or natural gas, the state can also receive royalty revenue.
DNRC Petroleum Engineer Zack Winfield said Bakken formation wells can now extend as far as four miles horizontally, opening new areas to possible development.
“Areas that were historically considered uneconomic for development are becoming very attractive to the industry,” Winfield said.
DNRC manages Montana’s state trust lands to generate revenue for schools and other trust beneficiaries while also considering environmental impacts and the lands’ long-term income-producing capacity.
By: DNU Newswire