An Opportunity
Published on Feb. 22, 2020
This past Monday, some of our legislative leaders, Gov. Gordon and a few others announced in a joint news conference their support for bipartisan Senate and House bills that would appropriate state funds to purchase checkboard lands in southern Wyoming from Occidental Petroleum.
This purchase was of some one million acres of private surface acres and some four million acres of mineral rights along the Union Pacific Railroad. Most of the private acres would be in Sweetwater County and to the West. These acres have been previously owned by Anadarko Petroleum.
These are lands given to the Union Pacific Railroad by the government to build the Transcontinental Railroad from Omaha, Neb. to Sacramento, Calif. Ever since then, whomever has owned these properties, has been the largest private surface landowner and I would guess, the largest mineral rights owner in Wyoming.
When Occidental Petroleum purchased these lands, they were part of a bigger deal to purchase all of Anadarko Petroleum, which included production and mineral rights in the Permian Basin in Texas.
Shortly after, Occidental Petroleum announced they would sell some of the recently acquired assets including those in Wyoming.
The lands the state is interested in not only have huge potential for a vast array of minerals and proven production with reserves in oil, natural gas, trona, coal and other minerals. Mineral wise, these lands are a treasure chest and the surface lands have all of the above uses Wyoming has to offer.
Six months ago, some Wyoming leaders initiated discussions about the state acquiring these assets. The House and Senate bills are a result of these discussions, along with some complimentary bills to help with the purchase. As it should have been, these preliminary discussions were quiet and not made public.
As you know, even though it would involve state funding, a transaction this big required closed discussions. I can’t imagine Occidental Petroleum sitting at the table if they knew it would be a public discussion or with the press there. The public part came when the related bills were brought to the legislature this past week.
The funding for these assets would come from the following state accounts: Legislative Stabilization Reserve Account, Permanent Wyoming Mineral Trust Fund, Common School Permanent Land Fund and other funds managed by the State Loan and Investment Board and the Board of Land Commissioners.
This week, everyone is asking whether or not this is a good deal. And the answer is nobody will know until a deal is agreed on. These lands have a great value, as proven by the previous publicly traded companies, who have purchased these lands and then sold them for cash, as all mineral companies do to keep their stock values up. That’s how they do business.
The state is most likely buying it for the long haul in mineral production and surface use opportunities for people and wildlife. But the state could also sell it at some time when prices are high.
When one looks at where the surface lands are located, a lot of the checkerboard lands surrounding them are lands owned by companies who have sold these acres as 40-acre ranchettes. People have bought them and then abandoned them and all there is left is their junk and busted down trailers.
The Red Desert has townships of these eye-sore acres. This is a deal where the devil is in the details. I’m willing to stand back and wait for the details. I commend those who have brought this deal forward, it just could be what’s best for the future of Wyoming.
