Colorado Oil, Gas Lease Sale Raises Close To $7M

DENVER (AP) -- The Colorado State Land Board's quarterly oil and gas lease auction raised close to $7.5 million Thursday from bids for 245 parcels, according to initial results.

Final audited results won't be available for several more days.

Leases covering about 122,000 acres were offered Thursday. An initial report shows the high bid per acre was $700 for a tract in El Paso County.

The highest price ever bid at a State Land Board auction was $5,850 per acre for a 320-acre parcel in Weld County in August. A 2010 auction that raised $26 million is the agency's most successful on record. That auction offered just 67 tracts covering close to 28,000 acres.

The next auction is in February, and about 500 tracts have been nominated for listing. State officials expect to be able to list only half. The rest would be held for another auction, if the nominations are cleared.

Energy companies would owe the state a royalty rate from the leases of one-sixth of their production.

Money raised from the state auctions largely goes toward supporting schools and other institutions.

Colorado has drawn interest from companies looking to extract liquid oil and natural gas from shale formations, including the hot Niobrara play. Anadarko Petroleum Corp. said this week it believes the equivalent of 500 million to 1.5 billion barrels of oil could be produced from the Wattenberg field in northeast Colorado.

But there's even some interest in land to the southwest.

Landman Tommy Yowell, of Nocona, Texas, said he remembers being able to bid around $10 per acre for leases in Kiowa County about 10 years ago. Leases in that area were going for as much as $100 to $375 per acre Thursday.

By Catherine Tsai, AP Writer (© Copyright 2011 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)