The NewsRoom
Release: #3903
Date: October 9, 2008
Onshore
RIK Gas Sale Nets Four New Contracts
Gross Revenues
Expected to Exceed $384 Million
DENVER – More than 76
billion cubic feet of natural gas was sold to four companies in a
Federal Royalty in Kind (RIK) onshore gas sale conducted this month
by the Department of the Interior’s Minerals Management Service
(MMS).
The sale offered royalty gas
from Federal lands in the Jonah-Pinedale area in western Wyoming.
The more than 76 billion cubic feet of royalty gas, or approximately
240,000 MMBtu (Million British Thermal Units) per day, was sold
under five- or 12-month contracts with delivery scheduled to begin
on November 1, 2008.
The 76 billion cubic feet of gas
is enough to supply the average gas needs of more than 950,000 U.S.
homes for one year.
If current natural gas prices in
the area were to remain at $5 per MMBtu, the sale would equate to
more than $384 million in total gross revenues. Actual revenues will
vary based on natural gas prices over the life of the contracts.
The state of Wyoming will
receive nearly 50 percent of the revenues generated by the sale of
Wyoming gas, since the gas production occurs within that state’s
borders.
Eleven companies submitted 75
bids on the gas packages offered, with four companies awarded
contracts. Winning bidders are Constellation Energy Commodities
Group Inc., Oneok Energy Services Co., Sempra Energy Trading, and
Shell Energy North America.
The gas sold in the RIK sale
involves an aggregation of gas royalties taken “in kind” by MMS in
the form of product, rather than “in value” or cash payments, from
gas production occurring on Federal lands in Wyoming. MMS then sold
the gas competitively in the open marketplace.
Begun as a pilot program more
than 10 years ago, the Royalty in Kind Program is designed to ensure
a fair return on the public’s royalty assets, improve government
efficiencies, reduce regulatory costs and reporting requirements,
and shorten the compliance cycle.
Contact:
Patrick
Etchart 303-231-3162
MMS: Securing Ocean Energy & Economic Value for America
U.S. Department of the Interior
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Last Updated:
10/09/2008,
04:56 PM Central Time
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