Oil frenzy spurs record-setting bids to explore for oil in Neb. Panhandle; schools to benefit

Oil frenzy spills into Neb.; schools get the money

LINCOLN, Neb. — A scramble for oil in Colorado and Wyoming has spilled over into western Nebraska, and the state’s public schools will benefit from the gush of money.

Officials with the state’s Board of Educational Lands and Funds say an oil and gas lease sale it held about two weeks ago attracted record-high bids totaling more than $1.9 million, almost four times the previous record set two years ago.

“This sale was just unbelievable, and it all goes to the schoolchildren,” said Laura Bahr-Frew, mineral rights administrator for the lands and funds board.

The board owns the 1.3 million acres left from a land contribution by the federal government in 1867 and collects rent on thousands of agricultural leases. It also collects rent on mineral leases from some of that land, and land it has sold in previous years.

Most of the leases purchased during the recent sale are for exploration in the Panhandle’s western edge near the Wyoming and Colorado borders, with the highest bids for leases in Kimball and Banner counties.

There, bids for two sections of land exceeded $300 per acre, with one approached $400. The previous high bid Bahr-Frew could recall was about $100. That was more than 20 years ago.

Spurring the speculation is a recent oil find in Weld County, Colo., which borders Kimball County to the south, said Bill Sydow, director of the state Oil and Gas Conservation Commission.

New drilling technology used in North Dakota’s geologically similar — and booming — Bakken formation has also led to speculation that a similar boom could happen along the Niobrara shale now under exploration. It extends beneath western Nebraska and northeastern Colorado, as well as southeastern Wyoming.

Sydow was lukewarm about the chances of significant oil finds in three of the four counties where almost all the leases were purchased — Kimball, Scotts Bluff and Sioux — and said people he has talked to believe most of the oil is in Colorado and Wyoming. Record-high bids that dwarf Nebraska’s $1.9 million were recently set in those states.

He characterized the oil prospects for the four-county area as “up in the air.”

“I like Banner County the most,” Sydow said of the fourth county sharing the largest proportion of leases purchased, “but it remains unproven.”

Denver-based Bear Oil and Gas submitted the highest bids for land in Kimball and Banner counties. Bear Oil officials didn’t respond to a message seeking comment.

State and school officials in Nebraska hope the oil prospectors find what they’re looking for: One-sixth of revenues from oil production on land where the lands and funds board owns mineral rights goes to the state’s K-12 public schools.

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Online:

www.belf.state.ne.us