Home News Local News Lease sale on 79 Chaves County parcels planned

Lease sale on 79 Chaves County parcels planned

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A sizable number of Chaves County parcels are expected to be offered at a federal oil and gas lease sale in August, coming at a time when oil prices have stabilized and the industry is expecting a rebound.

Oil prices fell to below zero dollars a barrel in April due to a dispute between Russia and Saudi Arabia that led to overproduction and a glut in supply. The pandemic also caused industry disruptions.

But oil prices began climbing in May and stabilized at about $40 a barrel in June, after production agreements were reached with OPEC Plus and other parties. The U.S. also increased the amount of oil it accepted into its strategic reserves.

President Donald Trump announced Wednesday that he was approving two permits for railways and infrastructure to enhance oil and gas trading between Texas and Mexico. He also said that liquified natural gas authorizations can now be granted until 2050.

Earlier in July, U.S. Energy Secretary Dan Brouillette said that the department’s Energy Information Administration was projecting a return of strong oil and gas demand by the end of 2020 and into early 2021.

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Against that backdrop, the U.S. Bureau of Land Management plans its auction involving Chaves County parcels.

The leases were supposed to be part of a May 2020 auction, but that was delayed because of the coronavirus pandemic. The leases will now be combined with another lease sale, with the May 2020 group to be auctioned Aug. 27.

As planned now, the Aug. 27 sale would involve 79 parcels in Chaves County, as well as 15 parcels in Eddy and Lea counties, for a total of 45,414 acres. In addition, one lease would involve a parcel of about 32 acres in Wise County, Texas.

Five organizations and individuals have submitted protest letters.

The leases originally planned for the August auction are expected to be sold Aug. 26. Those involve 10 parcels in Eddy and Lea counties, three parcels in Oklahoma and seven parcels in Texas.

The BLM also plans an October 2020 lease sale that would include parcels from Eddy, Lea and Chaves counties.

Senior Writer Lisa Dunlap can be reached at 575-622-7710, ext. 351, or at reporter02@rdrnews.com.