Moffat County to conduct mineral lease auction this month

In other action ...

At its regular meeting Tuesday, the Moffat County Commission:

• Approved, 3-0, Resolution 2011-119, appropriating $83,760,631 for the 2012 Moffat County budget.

• Approved, 3-0, Resolution 2011-118, summarizing expenditures and revenues for each fund and adopting a budget for Moffat County for calendar year 2012.

• Approved, 3-0, Resolution 2011-120, setting the county’s voter approved mill levies at 23.872 mills.

• Approved, 3-0, Resolution 2011-121, amending the distribution of sales tax.

• Approved, 3-0, Resolution 2011-122, setting the mill levy for the Maybell Irrigation District at 410 mills.

• Discussed discontinuing the annual bid process for official newspaper and stationary/printing services.

• Heard road and bridge monthly reports.

• Approved, 3-0, Connell Resources gravel pit conditional use permit amendment.

• Discussed Peterson Tallgrass R.V. park conditional use permit.

The Moffat County Commission voted Tuesday in favor of hosting another mineral lease auction this month.

Dan Davidson, director of the Museum of Northwest Colorado, and Jeff Comstock, Moffat County natural resources director, presented the commission with a list of 34 parcels encompassing more than 640 mineral acres.

The county owns approximately 200 acres going up for bid. The museum owns the remaining 440 acres.

Davidson said the parcels are smaller than what has been put up for auction in the past and that all but one of the tracts have been leased before, but never developed.

Tracts range in size from three-tenths of an acre up to 153 acres.

“The main difference between this auction and every other auction we’ve brought to you is those auctions were done by township and these will be by tract,” Comstock said. “In other words, we pulled all of the acreage we had in a given township and said you bid by township and winners received all of the acres in that township. This time they will bid on a specific parcel.”

Comstock said he and Davidson decided to place the acreage up for bid by tract to attract high dollar bids.

“The leasing of all our minerals is pretty much over with and we think there are some parcels in here that won’t even receive a bid and we didn’t want to burden those parcels by making someone bid on a whole township,” Comstock said. “We want them to pay top dollar for the parcels they want.

“If they had to bid on parcels they didn’t want, we think that would drive the price down. We’re safer to not even lease those minerals if people don’t want them than to make them part of a township.”

In terms of revenue, Comstock believes the parcels will fetch lower prices than past auctions.

“Dollar wise, I would say it’s probably going to be small and I don’t expect $1,000 an acre bids like we got last time,” Comstock said. “There was a lot more competition last time and I say that because companies were posturing and competing for the same areas, but now they have divided up their turf.

“The competition is not there like it used to be, so I expect the prices to go down.”

Commissioner Audrey Danner said she believes the size of the parcels will also play a part in the bids.

“You’re right, when you’re offering up 300 or 400 acres, companies are chomping at the bit to get that,” Comstock said. “When you’re offering up fractional acres, it’s just not as important to them.”

Davidson said two tracts up for auction are unique.

One tract is inside Craig city limits beneath the Moffat County Fairgrounds and another is under surface acres owned by the Bureau of Land Management.

“Because of the city’s (and BLM’s) restrictions on drilling, I would imagine that if a company wanted to access those minerals they would have to come in directionally,” Davidson said.

But, Moffat County Commissioner Tom Mathers joked that he would like to see a rig online in town.

“I would think that a drilling rig out there with a light on top would be prettier to look at than a Ferris Wheel,” he said.

The sealed bid auction takes place from December 13 through Jan. 4, 2012.

The county’s terms include a 3/16-royalty rate on mineral development, lease contracts of three-years and bidding begins at $100 per acre.

Revenues generated from any successful leases and subsequent mineral development will benefit the county’s various taxing districts.

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