New Mexico Oil & Gas Lease Sale Postponed
The U.S. government abruptly postponed a scheduled auction of oil & gas leases by the Bureau of Land Management (BLM) in New Mexico this week, without providing an explanation as to the reasons for doing so. “The oil and gas lease sale scheduled for May 20-21, 2020 has been postponed,” said a notification posted on the BLM’s website.
The BLM had planned to offer 94 parcels covering approximately 45,000 acres in the Permian Basin located across Chaves, Eddy and Lea Counties in New Mexico, and Wise County in Texas.
The proposed auction would have been the first government sale since WTI crude oil futures briefly plunged below zero for the first time in history last month.
The abrupt postponement of a federal lease sale is highly unusual and has likely caused prospective bidders consternation because buyers need to plan ahead to arrange funding for winning bids, the payments for which are required to be made on the same day.
Various environmental groups had recently opposed plans to hold the auction this month, arguing that it should be postponed because of the ongoing pandemic and market conditions However, industry experts do not believe that the protests were the reason for the postponement.