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Drillers entitled to repayment of lease funds if Wyo Range wells nixed, says BLM

Mar 27, 2014 - The Associated Press

JACKSON -- A U.S. Bureau of Land Management official says the government would need to repay $2.6 million to petroleum companies if the U.S. Forest Service decides next year not to allow gas drilling in part of the Wyoming Range.

Leases in a 65-square-mile area of the mountain range south of Jackson have been in limbo for years.

The BLM approved and sold the leases to petroleum companies in 2005, but the leases still await approval from Bridger-Teton National Forest.

The U.S. Forest Service announced last week that it is preparing to decide in May 2015 whether to allow drilling in the area 35-75 miles south of Jackson.

If the Forest Service rejects drilling, the lease-holding companies would need to be refunded $2.6 million in "bonus payments" they paid up front for the leases, said Greg Noble, assistant field manager in the BLM's Pinedale Field Office.

He said to the best of his knowledge, the money went into state coffers and the U.S. Treasury.

"There would have to be special line-item funding, somehow, to pay the companies back," Noble said. "It's problematic, to be certain."

In order to prevent drilling from taking place, a conservation group in late 2012 bought out leases held by Houston-based Plains Exploration and Production on a 90-square-mile area in the Wyoming Range near Hoback Junction.

The buyout halted plans for 136 gas wells.

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