Lease terms, Monte Mason memo from JP Pomnichowski

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Tom

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Aug 18, 2008, 1:09:12 PM8/18/08

to Bridger Canyon Forum

Hello,

Here is information from the DNRC, including a memo with an overview
of the leasing process and a sample oil and gas lease. Section 17
details the penalties that apply if exploration doesn't occur within 5
years; at a bare minimum, a 640 acre parcel would cost $16,800
(including the annual rent and non-development penalties) for the life
of the 10 year lease.

Section 5 talks about the minimum annual rental, and
Sections 6, 7, and 8 address royalties. Note Section 21, the "offset
protection”, which reads "The lessee shall commence promptly and
diligently drill to completion all wells necessary on the lands under
this lease in order to fairly offset commercially producing oil or gas
wells on contiguous lands or pay a compensatory royalty."

I’ve asked who nominated these sections for lease, but the DNRC says
that info is not made available until after the sale. That has to do
with a competitive auction, so that bidders don't know who the
nominating entities are, as they may be bidding against them.

As I emailed earlier, in FY2008, 4,653 parcels (1.9 million acres)
were leased, 606 of those parcels (225,000 acres) are active; total
revenue on oil and gas leases (though this doesn't exactly correlate
to the active parcels, since non-active parcels are paying rent) =
$31.3 million.

I’ll send more info and I find it or receive it.

Best regards,

JP Pomnichowski
Montana State Representative
House District 63, Bozeman/Gallatin County
406 587 7846 pomn...@montanadsl.net

The attachments are in the Files section of the forum:

http://bridger-canyon-forum.googlegroups.com/web/NonDevMemo.pdf?gda=pDhm7UAAAAC2MlmJ6AOmSmfEnRxFBeulop_sazw3JjKszPV21W89jsB98wCpxwHOeHkWyWpr6AdtxVPdW1gYotyj7-X7wDON&gsc=I3tUJwsAAAC8sR62_1TI4zp7DfMYzLAd

http://bridger-canyon-forum.googlegroups.com/web/DS-423.OGLease120605.Example.pdf?gda=oJsaE1IAAAC2MlmJ6AOmSmfEnRxFBeulG1K-AE9CjExw33VzHlaLuQGOtUXRq-9zD4MAUn-9_eZ8jYc5pVcg7AmvOj89v2BqVeLt2muIgCMmECKmxvZ2j4IeqPHHCwbz-gobneSjMyE&gsc=I3tUJwsAAAC8sR62_1TI4zp7DfMYzLAd

Charlie Crangle

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Aug 18, 2008, 2:19:26 PM8/18/08

to bridger-ca...@googlegroups.com, Mary Bahn

What follows is an email I got in response to an email to our Senator, Larry Jent. He has joined the posse and from the tone of his email- he is a most welcome member! Hopefully our governor is beginning to feel enough heat from enough quarters that we can still find a way to turn this unbridled horse around.

Charlie

**********************************************************************************************************************

Dear Charlie,

Thanks for writing me about the Bridger canyon Leases; I agree entirely with your position. Everyone, including me, was ambushed by this outrageous proposal and the way it was consummated. I am back in my office today and will start raising hell with the governors Office and DNRC to try to make this thing go away.