West Texas Oil and Gas Bids Bump Up Average to New High
Competition for oil and gas leases in West Texas bumped up the average bid per acre to the highest price ever at a regular Permanent School Fund lease sale, Texas Land Commissioner Jerry Patterson announced today. “This is great news for the schoolchildren of Texas,* Patterson said. “This lease sale shows that there is still strong interest in West Texas.”
The state’s $22 billion Permanent School Fund which helps pay for the state’s share of public education received more than $13 million at the July 20 oil, gas and wind lease sale, awarded by the School Land Board. Strong competition for school fund mineral leases in the West Texas Wolfcamp and Bone Springs formations, as well as the South Texas Eagle Ford play, bumped up the average among the 39 bids to a record high of $1,372. The most active bidder was Steven W. Horn with $8.5 million in bids.
Generally, exploration bonuses range from $200 to about $2,500 an acre depending on the location and geology.
Only two bids were received for lands lying in state waters. Both tracts leased are adjacent to the shoreline in shallow bay waters. In the quarterly lease sales held by the Texas General Land Office, oil and gas firms submit sealed bids for the right to drill for hydrocarbons on Permanent School Fund lands. The Permanent School Fund will also earn 20 to 25 percent royalties on any oil or gas produced on the leases.