Nearly three weeks after submitting a bid to Occidental Petroleum for 1 million acres of land and 4 million acres of mineral rights, the state of Wyoming has had no word from the oil and gas giant, state officials said this week. 

“It’s been absolute radio silence,” Gov. Mark Gordon said during lunchtime remarks to the Cheyenne Rotary Club Wednesday. Gordon maintains optimism, he said.

“I don’t exactly know what that means,” he said of the silence. “My sense is we’re being considered.”

But one key official in the potential transaction, Wyoming Chief Investment Officer Patrick Fleming, said the silence could bode poorly for Wyoming’s prospects. The lack of response so far is “possibly not good for us,” Fleming told WyoFile in a text message Monday.

Wyoming is one of six potential buyers Occidental invited to submit bids for the swath of land and minerals along the I-80 corridor. The land’s checkerboard pattern of ownership — a legacy of historic land grants from the federal government — plays a defining role in many aspects of energy development, cattle grazing and recreation across southern Wyoming. 

The other bidders are either unknown or aren’t being disclosed by state officials. Proponents of the deal have suggested rival buyers could be anyone from the billionaire Michael Bloomberg to the Mormon Church to a foreign nation like China. 

Wyoming submitted its initial bid on July 8, Gordon’s energy policy advisor Randall Luthi told WyoFile. However, the state then “superseded” that bid with a new offer on July 10. Whether the second bid was higher than the first “remain[s] confidential,” Luthi wrote in an email Wednesday. 

“There was additional information analyzed by the investment bank, which caused a new look at the bid,” Luthi wrote. The investment bank Luthi is referring to is Barclays, the state’s high-priced consultants on the deal.

Officials from Barclays were also in the dark on what Occidental was up to and what it could mean, Luthi said in a phone interview Monday. “They’re curious as well,” he said. “Most speculation has been that not hearing immediately was a good thing. That means you weren’t rejected right off the bat.” 

Still, Occidental also “certainly could be” negotiating with another bidder, Luthi said. “Anybody can speculate what they’re doing or not doing and that’s all it would be,” he said. 

Wyoming’s bid does not have an expiration date, and there was no timeline for Occidental to reply, Luthi said. Both Luthi and Fleming said the next step is in the seller’s hands. 

“Given the amount and complexity of the purchase and since there are a lot of issues that would still be negotiable once OXY decides to negotiate further, we are truly on hold,” Luthi wrote. “At this point, we don’t see any reason to withdraw the bid, it was submitted in good faith and we are confident it is being carefully and conscientiously considered.” 

Wyoming hired Barclays to assess and advise on the purchase. The state agreed to pay the investment giant $2.5 million regardless of the deal’s outcome, and pay more fees depending on the purchase price if it does go through. To date, Wyoming has paid $1 million, according to a review of the Wyoming Auditor’s payment data. 

The first $500,000 came out of a state building account. The second installment came from the governor’s budget. 

In his remarks to the Cheyenne Rotary Club, Gordon again called buying the land a potential improvement for the state’s returns on its investment portfolio. Barclays was asked to evaluate all the potential cash flows from the land and mineral assets, Gordon said. 

“It would add about 2[%] to 3% to our return posture” on the state’s investments, Gordon said. Barclays made the analysis of returns with a certain price in mind, one that the state did not exceed in its offer, he said.

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Andrew Graham

Andrew Graham is reporting for WyoFile from Laramie. He covers state government, energy and the economy. Reach him at 443-848-8756 or at andrew@wyofile.com, follow him @AndrewGraham88

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  1. Trying to get a handle on this Occidental Petroleum (OXY) “deal” can have your head swirling.

    Is this a good deal for Wyoming? I certainly do not know. I see the fact that they may be buying 4 million acres of mineral wealth at a depressed price. Wyoming may be buying a million of surface acres that could be used for wind, solar energy development as well as the conventional uses such as grazing, and other profitable uses. What is the opportunity cost? Nobody is talking about if this deal is better than market investment or even other deals that might be a whole bunch better. I suppose that is why the director of Office of State Lands and Investments (OSLI) signed a highly unconventional contract with Barclays that seems to be paid from other pots of money in other agencies. It will be interesting to see if this is a misappropriation of funds down the line.

    The next questionable problem is that SLIB is defining a new class of land that is not granted by law. The land purchase would be from the Permanent Mineral Trust Fund (PMTF) as “investment land”, and would be managed by contract through the Treasurer’s Office. It would not be part of the state lands that are managed by OSLI. As an investment it should be managed to make the best use of the PMTF and provide a good return to the fund. Suppose there is a grazing lease on the investment land and someone offers a better deal for the state. The treasurer managing the land should take the best lease offer, maybe even auction the grazing lease. Oops, the protections for grazing leases in the law would not apply as these are not state lands, rather they are “investment lands”. Imagine the types of corrupt deals that could happen. A new treasurer could reward his campaign supporters with deals for land after a successful election. He could also punish political enemies by depriving them previous agreements.

    Some folks say that a new agency would be created to handle this investment. Oops, this is PMTF investments. The trust fund in part or in whole should not be transferred to a different agency. Certainly, transferring the PMTF investment management to a separate agency has no provision in statute. As an investment, the treasurer would be obliged to pay the cost associated with management of the land. This would include the taxes to counties. Imagine what an advantage the treasurer would have when he protests an increased assessment by the Carbon County Assessor. If the legislature were to create a means of paying the taxes outside of the PMTF, would it be fair? Nope! Why should Campbell County residents pay Carbon County taxes because of the conflicts caused by a SLIB investment in land?

    Philosophically speaking, does this land purchase control the means of production. Certainly, that was what OXY was doing when they bought it. Would “investment land” of the PMTF be competing with Wyoming owned State Lands? Could Wyoming buy businesses outright and compete with Wyoming citizens? Why not? This land deal suggests that the Investments of Wyoming do not have any limits. The state could buy Crazy Woman Creek Bancorp CRZY (OTCQB) with a market cap of only $6.36 million. But this is a state regulated bank, competing with other banks in Wyoming. Should the State control business interests in Wyoming through it’s “Investment Power” controlled by the five electeds? Isn’t this purchase exactly against “the genius of the free enterprise” system that is part of our constitution? If you don’t believe this “investment” puts Wyoming into business, then consider the other bidders for the land. They are all businesses, either for profit or non-profit businesses. OXY bought the land from Anadarko as a business investment, wouldn’t Wyoming become a land management company same as OXY?

    The map of the lands that OXY is seeking to sell includes lands in Colorado and Utah. I know that there are sometimes purchases of land state to state. They tend to be small like the purchase of land in the Wind River range for a University of Missouri geology camp. What if a state started purchasing significant holdings of land in other states? Could one state annex the land of another state after purchasing lands as an “investment”? Surely that would be an interesting question. We clearly don’t even know if the Wyoming bid included lands in other states as the process is deemed secret.

    Secrecy is a big deal here. Transparency is pretty much absent. It was addressed by nearly every public comment in the SLIB meeting for the “deal”. It is very troubling to not have extensive public discussion on the issues above as well as many others brought up in the meeting prior to the Wyoming Bid.

    Finally, “Radio Silence” From OXY. Perhaps the General Counsel for OXY is concerned that a government bid may become mired in litigation. The questions above might all be the foundation for more than one party filing suit to block Wyoming from getting the land. Can OXY or Wyoming withstand a challenge over statutory and constitutional issues? Can OXY risk their business over the time that might be spent in court versus selling it to someone other than Wyoming, who could close the deal faster? OXY does not have to be transparent, but does Wyoming Executive Branch Elected Officials have to be transparent?

    As always Mr. Graham does a good job covering the news, or in this case, lack thereof.

  2. IF that is the coal permit at, Sheridan , that was denied, turned down, they had no justifiabial plan

  3. We should be paying attention to the Occidental side of the poker table.
    In February , Occidental stock was pegged at just under $ 50 a share. This week it’s sruggling to make $ 16.00
    The company is entertaining a serious bid to sell itself lock , stock and 55 gallon barrel to Pertamina, the state owned oil company from Indonesia that also has assets in Africa and the Middle East. Other investors are interested in swooping up Oxy. That would include its huge debt… Occidental very foolishly overextended itself and bought Anadarko Petroleum last year ( formerly big in Wyoming) for $ 32 billion and is struggling to pay the debt service, let alone principal , even though Warren Buffet significantly increased his ownership in Oxy in February before the global oil stock crash. Buffet should have waited a few months and bought stock at the lowball price. And here we are.

    Yes, Occidental is shopping itself around , and the stakes are high. I personally do not believe the State of Wyoming can afford to invest in fossil fuels and fossil mineral rights or surface land of questionable intinsic attributes. The transaction favors the Seller ( motivation ) not the buyer ( desparation ). It’s a huge gamble.

    Better that Wyoming invest in the future, not the past. It should have done that 20-30 years ago . The timing at the moment is quite bad for both buyer and seller. The SARS Cov-2 virus is also in the game