Home News Local News Artesia oil firm pays more than $7M for Chaves County leases

Artesia oil firm pays more than $7M for Chaves County leases

Slash Exploration L.P., one of the partnerships owned by Armstrong Energy Corp. and Robert G. Armstrong, shown in this 2016 photo, recently won the oil and gas lease for a Lea County tract. (Lisa Dunlap Photo)

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Chase Oil Corp. in Artesia was the primary winning bidder on leases in Chaves County during the recent U.S. Bureau of Land Management auction.

Sales results posted by the BLM indicate that Chase Oil has leased nine of the 18 Chaves County tracts involved in the lease sale, while R & R Royalty Ltd. of Corpus Christi, Texas, has won five leases and Cobra Oil and Gas Corp. of Wichita Falls, Texas, has obtained oil and gas leases on four parcels.

The 18 parcels in Chaves County were leased, including fees and first-year payments, for a total of $8.21 million during the Sept. 5 and 6 online auction. Standard lease terms are 10 years, although leases are sometimes extended if oil and gas wells are productive at the end of 10 years.

The auction involved a total of 142 tracts in Lea, Eddy and Chaves counties. The federal sale raised a record $972.48 million from more than 60 different bidders from Texas, New Mexico, California, Utah, Oklahoma and Colorado. The revenues raised by the sale will go to the U.S. Treasury, as will royalties from oil and gas production. About 48 percent of the money will be returned to New Mexico for federal operations, roads, rural schools and payments made to local governmental entities.

Chase Oil Corp. leased 5,801 acres in Chaves County for about $7.89 million, according to the posted results. Cobra Oil and Gas leased 2,289 acres in the county for $141,569, while R & R Royalty leased about 723 acres in Chaves for $161,722. These amounts do not include the fees collected.

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The results also showed that two Roswell-based firms secured leases in Eddy and Lea counties.

Featherstone Development Corp. won the bid on 10 parcels in Lea and Eddy counties totaling close to 2,290 acres for about $1.02 million. Slash Exploration L.P., one of the partnerships controlled by the Armstrong Energy Corp., won the oil and gas lease for a 280-acre parcel in Lea County for $78,680.

Jim Winchester of the Independent Petroleum Association of New Mexico said the lease sale results show that the Permian Basin is the “hottest oil play in the world” and said the group continues to “encourage responsible oil production that benefits all walks of life in our great state.”

Senior Writer Lisa Dunlap can be reached at 575-622-7710, ext. 311, or at reporter02@rdrnews.com.