Royalty Uproar; Public meeting Friday to discuss state-owned oil and gas

There will be a public meeting Friday afternoon (June 10) in Cheyenne to discuss proposed revisions to the standard lease form for state-owned oil and natural gas — the first such revision in 20 years to clarify and update bonding, valuation and other business regarding state-owned oil and gas resources.

The public meeting will be held from 2 p.m. to 5 p.m. at the Herschler Building, in conference room 1699.

A state mineral lease auction in July 2010 netted $42 million on speculation of the Niobrara oil play in southeast Wyoming. (Dustin Bleizeffer/WyoFile – click to enlarge)

The revisions were first made public last fall, and were sharply criticized by some in the oil and gas industry because of a provision to raise the maximum royalty rate. Later, the royalty provision was tabled, “After considerable discussion with industry and others,” according to a state document.  Some industry leaders had said the proposed royalty hike (2 percent) would make state mineral leases less attractive, while proponents of the measure argued that it is the state’s fiscal responsibility to get as much revenue as it reasonably can for the publicly-owned minerals.

It’s unclear whether state officials will re-insert the proposed royalty hike back into the lease form revision. Because of controversy early on in the revision process in the fall of 2010, the State Lands and Investment Board delayed action so the issue could be revisited under the new Gov. Matt Mead administration. The board recently delayed action and directed the Office of State Lands and Investments to conduct a public meeting to accept more input from stakeholders.

— Contact Dustin Bleizeffer at 307-577-6069 or

EDITOR’S NOTE: This post was updated on June 10 to clarify the content of the proposed lease form revision.

Dustin Bleizeffer is a Report for America Corps member covering energy and climate at WyoFile. He has worked as a coal miner, an oilfield mechanic, and for 25 years as a statewide reporter and editor primarily...

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