Moffat County Commission OKs mineral sale bids
November 24, 2010
Also at the meeting
At is regular Tuesday meeting, the Moffat County Commission:
• Approved, 3-0, a transfer of payment of warrants for November totaling $350,990.36.
• Approved, 3-0, payment of payroll warrants ending Nov. 13 totaling $655,791.54.
• Approved, 3-0, a core services contract addendum with Kari Billette of Steamboat Springs adding court testimony services including authorized preparation time and report writing at $76 per hour.
• Approved, 3-0, an audit services engagement letter.
• Approved, 3-0, an author publishing agreement for the Museum of Northwest Colorado with Lifetime Chronicle doing business as London Publishing for various services and printing of 2,000 copies of the book “Buster Brown and the Cowboy” totaling $6,715.
• Approved, 3-0, department of social services accounts payable and electronic transactions totaling $304,855.91.
• Approved, 3-0, a grant support letter for the Yampa Valley Off Highway Vehicle Trail Riders club for purchase of a trail dozer and other equipment to be used by various land agencies for trail maintenance.
• Approved, 3-0, allowing the Moffat County Balloon Festival committee to host the 2011 Moffat County Hot Air Balloon Festival in Loudy-Simpson Park, to close the park for the three days of the festival and to waive the park use fee for the festival other than county personnel and other expenses.
• Approved, 3-0, a request from the Wyman Living History Museum that snow plowed by the county road and bridge department be brought to the museum for the Wyman Winter Festival.
• Approved, 3-0, Oct. 19 meeting minutes for the department of social services.
• Approved, 3-0, to proceed with a final technical energy audit with the Aurora-based Ennovate Corporation.
• Approved, 3-0, to enter into executive session regarding the lease of the Moffat County Public Safety Center.
• Approved, 3-0, to enter into executive session regarding negotiations and strategy of negotiations for Moffat County Road 47.
• Approved, 3-0, to offer the City of Craig a one-time purchase price for the Craig Police Department’s space in the Moffat County Public Safety Center totaling $1.083 million.
The offer includes city ownership rights of the 2,258 square feet of exclusive office space the police department currently occupies, one-third of undivided interest of 9,000 square feet of common space and continued access to the safety center garage and parking lot, among others.
• Heard monthly updates and various presentations from department of social services director Marie Peer.
Christmas came early for Moffat County this year.
Or, at least that's how Moffat County Commissioner Tom Mathers feels about a recent county mineral lease sale, which netted various county organizations an estimated $3.2 million.
At its regular Tuesday meeting, the commission approved, 3-0, to accept the results of a sealed bid auction and recommendation for sale of 13,463.65 acres of minerals, which provided an estimated $2.49 million in revenue to the county and $785,983.81 to the Museum of Northwest Colorado.
The high bidders awarded leases were Hannon & Associates, Axia Energy, Jack Overstreet and West Point Energy.
"It's a bonus," Mathers said. "It's a big chunk of money that we had not expected that came at a good time in a bad economy."
Moffat County Natural Resources Director Jeff Comstock and museum director Dan Davidson presented the commission with the results of the sealed bid auction.
The sealed bids were opened Monday, the day the commission "called Christmas all week long," Mathers said.
"We had no idea what they were going to come out (as), but we knew that some companies wanted them pretty bad," Mathers said.
Comstock said the county has seen significant interest from companies regarding leasing minerals owned by the county and the museum.
In most other cases, Comstock said the county or museum negotiates with the companies interested in leasing to get the best deal they can. But, Comstock said, the two organizations decided to put their minerals up for auction several weeks ago due to the amount of interest.
The county and museum placed 15,770.32 acres of minerals, located in southeast Moffat County, up for bid, 13,463 of which were leased. The price of the minerals leased averaged $350 to $450 per acre and reached a high of $605 per acre, Comstock said.
"It's actually very interesting to see the revenues that were $400 to $600 an acre," Comstock said. "Those are numbers this county has not seen in history."
Comstock also said the recent auction was the largest leasing effort the county has seen at one time in recent history.
However, Comstock said it is impossible to know how much, if any, mineral exploration and development will occur on the leased mineral acres.
"But, you know that when something is getting leased that there will be some effort for exploring it in the future," he said.
The leasing companies' interest in Moffat County minerals is confined to a portion of land known as the Niobrara formation, Comstock said.
"Niobrara is basically a geologic layer … and recently companies have figured out how to extract oil out of that," Comstock said. "There has been a leasing spree on the Niobrara formations of un-leased areas across the state, and we are seeing the results of that here."
The local portions of Niobrara formation oil companies are interested in run from the Craig area east to Milner, Comstock said.
"My hope is that land owners and mineral owners benefit from our lease auction," he said.
The various taxing districts benefiting from the lease sale include the Moffat County School District, Moffat County Affiliated Junior College and The Memorial Hospital, among others, Comstock said.
The school district will receive an estimated $1.31 million, the college will receive an estimated $132,891.02 and TMH will receive an estimated $130,397.76 allocated from the county's estimated $2.49 million in revenue.
Moffat County will pocket an estimated $866,908.24 from the sale — money Comstock said is restricted to the county's capital improvement fund.
However, the final revenue numbers allocated to the county from the sale will be determined after required title work has been done, Comstock said.
Mathers said he hopes oil production in Moffat County will follow in the wake of the mineral leasing activity.
"We have always had a lot of leases, but we've never really got to the production stage," he said. "We are hoping that this time, it'll go all the way and we'll actually be producing some money here."
Mathers said the mineral lease sale could have "huge" economic benefits to the community and could create a number of jobs depending on possible production of the minerals.
"This is just a win-win," he said. "Everybody wins on this deal. I mean even the community and there is a lot of (other) leases going to ranchers and farmers and mineral owners out there that are decent leases."
Davidson was lost for words when he was asked how he felt about the benefit the mineral lease sale would provide to the museum.
"I don't know what to say about that — those are just amazing numbers," he said.
Davidson said he felt the county did the mineral auction at the right time.
"Nobody could have ever foreseen that those would bring in that kind of potential money," he said.