Mineral contract yields $160K for Moffat County
August 9, 2011
In other action …
At its regular meeting today, the Moffat County Commission:
• Awarded, 3-0, a $2,700 bid to High Desert Ranch for a fence project at the Hamilton Community Center.
• Denied, 2-1, waiving a bid process for computer software requested by the grounds and maintenance department pending a workshop by the service provider.
• Approved, 3-0, a $39,794 bid from Patriot Highway Markings for county road striping.
• Heard a monthly report from Bill Mack and Linda DeRose, of the road and bridge department.
• Heard from Moffat County Land Use Board member Jean Stetson, who advised the commission not support new wilderness areas.
• Approved, 3-0, sending a letter to the Bureau of Land Management stating the commission’s opinion on proposed routes for new power lines.
• Approved, 2-0, Juvenile Services Planning Commission members. County commissioner Audrey Danner was selected for the board and excused herself from voting members..
• Approved, 3-0, the Moffat County Federal Mineral Lease District service plan.
• Excused, 3-0, $9,300 in uncollectible taxes.
The Moffat County Commission approved, 3-0, a mineral lease contract for 160 acres of county-owned land during its regular meeting Tuesday.
The agreed upon price was $1,000 per acre.
Quicksilver Resources, a Fort Worth, Texas-based oil and natural gas exploration and production company, received the contract.
The going rate for most mineral lease agreements in Moffat County is about $600 per acre, said Jeff Comstock, county natural resources director.
Quicksilver agreed to $1,000 per acre because the 160-acre tract has never been explored before, Comstock said.
"It's never been leased in history," Comstock said. "It's actually a very interesting case because no one knew who actually owned this tract."
According to research by Quicksilver's title expert, the 160-acre tract was re-platted by the federal government in 1907, when what is now Moffat County was part of Routt County.
Since then, numerous mineral exploration companies have tried to lease the land, but gave up because of ownership uncertainties between Moffat and Routt counties, Comstock said.
"Initially we thought it was (Bureau of Land Management) land," Comstock said. "But, a prudent title person at Quicksilver made the discovery, and even went to Routt to confirm it."
Comstock said he called the BLM to double check Quicksilver's findings.
In addition to owning the land, Moffat County owns all of the minerals below the surface.
"We actually now have the complete title work on this piece of land," Comstock said. "We're 100 percent confident that we own the land and the minerals, and that BLM won't challenge that we own them."
In addition to the $160,000 lease agreement, Moffat County will receive an 18.75-percent royalty from Quicksilver if the company makes a find.
"In other words," county commissioner Tom Gray said, "if they (Quicksilver) find oil and the going rate is $100 per barrel, hypothetically, the county will get $18.75."
The 160-acre parcel, referred to as Lot 15, sits on the banks of the Yampa River in Township 5, about 10 miles southwest of Craig.
The lease agreement with Quicksilver is good for five years, but does not stipulate a specific date on which exploration will begin.