The Department of the Interior’s Bureau of Land Management (BLM) held two oil and gas lease sales through its New Mexico regional office last week. In addition to its 3rd quarter sale, BLM’s New Mexico office conducted an auction for leases to develop oil and gas on plots of federal land (known as parcels) that was originally slated for May but was postponed. Compared to past lease sales in the region, the two auctions brought in remarkably little revenue for taxpayers. The lackluster results reflect the poor state of oil and gas markets and underscore the need for the BLM to strategically postpone further sales until a fair return for taxpayer assets can be secured.
In the two sales, the BLM opened up bidding for leases covering a total of 48,000 acres in three states. The first sale, which took place on Wednesday, offered 12 parcels – three in Oklahoma and nine in New Mexico -covering over 2,800 acres. All parcels received bids, which averaged roughly $450 per acre. In its second auction on Thursday, the BLM offered 94 parcels of federal land made up of over 45,000 acres. The second sale brought in just $150 per acre in bids, the second lowest bidding level in a decade for any New Mexico office sale, and just three percent of the average third quarter New Mexico lease sale since 2010.
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Lease sales conducted through the BLM’s New Mexico Office are often some of the most lucrative for federal taxpayers, but the current economic climate makes leasing less appealing to industry and less profitable for federal taxpayers. The BLM is scheduled to conduct another seven oil and gas lease sale in the next four weeks, but results may be similarly disappointing.