Nevada oil, gas exploration expected to pick up

Monday, June 20, 2005 | 11:13 a.m.

RENO -- High gasoline prices helped spur a record quarterly sale of oil and gas leases on federal land in Nevada, Bureau of Land Management officials said.

Last week's sale at the BLM state office in Reno netted nearly $3.1 million in bids, by far the most in 14 years of competitive oil and gas lease sales in the state, they said.

It also resulted in the highest number of total bids and acres sold. The BLM sold 163 of 344 parcels available for leasing across central and northern Nevada -- or 335,537 acres of 710,215 acres.

"Nevada's potential for oil and natural gas production is largely unexplored," said John Menghini, petroleum engineer for the BLM's Division of Minerals Management.

"For those in the energy industry, Nevada is the next frontier in oil and gas exploration. In the future, Nevada could become a major player in the nation's efforts to address domestic energy needs," he said.

Menghini attributed the surge in interest not only to strong global oil and gas prices, but to pending national energy legislation and discoveries in surrounding states that make experts think Nevada has greater potential than thought.

Gasoline demand in the United States has averaged nearly 9.5 million barrels a day over the last four weeks, 3 percent above the same period last year.

In the Nevada sale, the highest bid received for a single parcel was $219,260, while the highest bid per acre was $95.

During the last quarterly sale in March, more than $192,000 in bids were received for 46,123 acres.

For the 2004 fiscal year, more than $563,000 in bids were submitted for 139,398 acres scattered across central and northern Nevada.

Nevada's oil production largely has focused on remote Railroad Valley, about 50 miles southwest of Ely.

The state of Nevada will get half of the revenue generated by the recent sale.