March 10, 2020 / 11:53 PM / in a month

UPDATE 1-U.S. oil and gas lease sale in Utah draws few bidders

(Adds details of bidders, total receipts from BLM press release)

March 10 (Reuters) - A U.S. Bureau of Land Management (BLM) auction of 25 oil and gas leases in Northeast Utah received mostly minimum bids of just $2 an acre a day after oil prices collapsed due to the impact of the spreading coronavirus outbreak.

The sale representing 32,713.76 acres (13,238.79 hectares) drew total receipts of $284,070 including bids of $237,583 and administrative fees, according to BLM.

Hoodoo Mining & Production Co LLC of Houston walked away with 13 of the leases, all for $2 an acre, according to the sale’s results posted on the BLM web site.

The sale comes as North American oil and gas producers are contemplating here spending and drilling cuts on investor concerns about profitability with crude prices now almost half what they were in January.

BLM lease sales are part of the Trump administration’s “energy dominance” agenda to increase fossil fuel production on federal lands.

Three of the parcels in Tuesday’s sale received no bids, and just four sold above the minimum price.

The highest bid of $501 an acre was submitted by R&R Royalty Ltd of Corpus Christi, Texas. That 240-acre parcel was protested by the owner of the Sundog Airport, which sits within the lease parcel. BLM rejected the protest, saying the lease included a notice regarding the airport and that all development would be reviewed for conflicts.

All 25 parcels were in Uintah County, the state’s largest natural gas producer.

Eight environmental groups lead by the Southern Utah Wilderness Alliance jointly protested the sale of all 25 parcels due to the area’s poor air quality. The U.S. Environmental Protection Agency in 2018 declared an area in Uintah County in violation of federal ozone standards. The standard was exceeded again last year.

BLM offices will hold five more oil and gas lease sales later this month in states including Wyoming and Colorado. (Reporting by Nichola Groom Editing by Marguerita Choy and Richard Pullin)

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