Why do oil and gas companies spend hundreds of millions of dollars for oil and gas leases from the the American government and then not do anything with the land? And why do they and their Republican supporters in congress fight to mandate that they either develop the lands which they are leasing the oil and gas rights or loose the leases?

http://ap.google.com/article/ALeqM5imPz0z6szykAL-CAKZDEZOAiDREgD91VQ0AG0

It just seems to me that in a free market a rational person would not spend hundreds of millions of dollars on oil and gas leases and then just let them expire without developing the rights and producing oil and gas. Further, why would you as a lease holder be upset with a law requiring you to produce oil or gas from the property or loose the lease?

Can one of you so called free market capitalist pro-oil company Republicans explain this to me?

Why do oil and gas companies spend hundreds of millions of dollars for oil and gas leases from the the American government and then not do anything with the land?
Because oil is infinite and exploration and production (e&p) companies have a vested interest in artificial scarcity and a high commodity price.

And why do they and their Republican supporters in congress fight to mandate that they either develop the lands which they are leasing the oil and gas rights or loose the leases?
Offshore drilling is good for America, good for the world, and good for the environment.

It just seems to me that in a free market a rational person would not spend hundreds of millions of dollars on oil and gas leases and then just let them expire without developing the rights and producing oil and gas.
It's called "hoarding." Google it.

Further, why would you as a lease holder be upset with a law requiring you to produce oil or gas from the property or loose the lease?
Because it's not economic. Cheaper to pump wells already tapped or just bypass e&p altogether like the majors in favor of dividends and share repurchases.

Can one of you so called free market capitalist pro-oil company Republicans explain this to me?
Yes. Q.E.D.

Why do oil and gas companies spend hundreds of millions of dollars for oil and gas leases from the the American government and then not do anything with the land? And why do they and their Republican supporters in congress fight to mandate that they either develop the lands which they are leasing the oil and gas rights or loose the leases?

http://ap.google.com/article/ALeqM5imPz0z6szykAL-CAKZDEZOAiDREgD91VQ0AG0

It just seems to me that in a free market a rational person would not spend hundreds of millions of dollars on oil and gas leases and then just let them expire without developing the rights and producing oil and gas. Further, why would you as a lease holder be upset with a law requiring you to produce oil or gas from the property or loose the lease?

Can one of you so called free market capitalist pro-oil company Republicans explain this to me?

Oil Companies do explore those leases, right now there are areas on the OCS that are already known to have proven reserves, at known locations, and at shallow depths, bringing down the cost of production.

The vast majority of leases are not located in oil bearing zones, or they are in deep water sites.

The OCS zone would get the oil on line faster and at lower cost for the consumer, so that is why it is necessary to open the OCS again.

80% of the known oil sights are off limits, especially off the California Coast were known fields are located, and had been in production until the Moratorium passed by congress in 1983.

There are 20 Billion barrels of oil not being used.

http://www.signonsandiego.com/uniontrib/20080709/images/usa.gif

Oil company CEOs have said there is no oil and gas on those lands. If that is the case then why do they pay hundreds of millions of dollars for oil and gas leases on land they know does not contain any oil and gas. Is this the oil and gas industrys charity to the Federal Government? Are they trying to give back money to the federal government after lobbying for and receiving massive tax breaks and credits?

Oil company CEOs have said there is no oil and gas on those lands. If that is the case then why do they pay hundreds of millions of dollars for oil and gas leases on land they know does not contain any oil and gas. Is this the oil and gas industrys charity to the Federal Government? Are they trying to give back money to the federal government after lobbying for and receiving massive tax breaks and credits?

Take a note of the map, those leases are in the Gulf of Mexico, there are no other places open for leasing, there are no other off shore sites than the Gulf of Mexico available for leasing, and they are exploring those site as fast as possable.

http://tonto.eia.doe.gov/oog/special/images/katrina_large.gif

Now tell me that they aren't using their leases.

The on shore sites face the same problem, governmental red tape, moratorium, and suite's from environmentalist.

Buffallo, I am confused about your map. As there are a lot of oil and gas fields on land that have been leased to oil and gas companies that are not shown on your map.

Second, are you trying to tell me that the reason the oil companies have not developed the oil and gas leases they currently own and spend hundreds of millons of dollars for is because they want to develop cheaper oil and gas fields? If so, how is it cheaper to build an offshore oil platform and drill oil off shore than it is to drill oil on shore?

http://resourcescommittee.house.gov/index.php?option=com_content&task=view&id=389&Itemid=1

And why buy all of these oil and gas leases if you are not going to use them...trying to give back some of the tax breaks the industry lobbied for and received from the Republican Congress and President?

Take a note of the map, those leases are in the Gulf of Mexico, there are no other places open for leasing, there are no other off shore sites than the Gulf of Mexico available for leasing, and they are exploring those site as fast as possable.

http://tonto.eia.doe.gov/oog/special/images/katrina_large.gif

Now tell me that they aren't using their leases.

The on shore sites face the same problem, governmental red tape, moratorium, and suite's from environmentalist.

But if as you claim there are no other leases available, then why is the Bureau of Land Management in Colorado auctioning off oil and gas leases in Colorado as recently as 2 months ago? I noticed Colorado was not listed on any of your maps.

http://www.blm.gov/co/st/en/BLM_Information/newsroom/2008/blm_colorado_announces.html

Buffallo, I am confused about your map. As there are a lot of oil and gas fields on land that have been leased to oil and gas companies that are not shown on your map.

Second, are you trying to tell me that the reason the oil companies have not developed the oil and gas leases they currently own and spend hundreds of millons of dollars for is because they want to develop cheaper oil and gas fields? If so, how is it cheaper to build an offshore oil platform and drill oil off shore than it is to drill oil on shore?

http://resourcescommittee.house.gov/index.php?option=com_content&task=view&id=389&Itemid=1

And why buy all of these oil and gas leases if you are not going to use them...trying to give back some of the tax breaks the industry lobbied for and received from the Republican Congress and President?

Why buy all those leases, because there just might be oil there, now all of those leases include, those in the open drilling zones in the Gulf of Mexico which are producing and those on land, which have been explored and found to be dry, or put into production, or the Strategic Oil Reserves.

The other thing is that many of those leases go back decades and are not viable drill site.

The situation for drilling on land is the same for drilling off shore, Moratoriums Red Tape and environmental suites.

On land those leases have been explored and oil has been found, it was put into production, or if nothing was found, the company still holds the lease, as of now, after a lease is issued it doesn't expire, so that is why there are some 16 million aces of land under lease, it has been explored, and if it was found to have commercially viable amounts of oil, and not on the Moratorium list it is put into production.

But what is 16,000,000 aces of land? just how big is that in comparison to the U.S. which has a land mass of 3,794,066 sq mi.

16,000,000 is 25,000 sq miles against a total land mass of 3,794,066 sq mi,
there are 650,000 sq. miles of off shore that are blocked by Moratorium, and that area has known oil deposits, that don't need to be found, set the platform and sink the drill, and production.

But if as you claim there are no other leases available, then why is the Bureau of Land Management in Colorado auctioning off oil and gas leases in Colorado as recently as 2 months ago? I noticed Colorado was not listed on any of your maps.

http://www.blm.gov/co/st/en/BLM_Info...announces.html

Because I have been addressing off shore drilling, and those sites that are known to have oil on the OCS, that is what this thread is about, the fact that the President has lifted the Presidential Moratorium on drilling the OCS

I think you might be confused Buffalo. I created this thread and posted the original question. I know there are similar threads, some started by you.

But my question was and is, why do oil and gas companies buy oil and gas leases on lands they claim do not have oil and gas on them? I am just not getting the rational. They have purchased these leases. They continue to purchase theses leases. And they continue to fight like hell to keep from being required to develop and produce oil and gas from these properties that they claim do not have any oil and gas.

If these lands don't have any oil and gas as the industry claims, why spend money on them? Why buy them? What is the rational for buying the oil and gas leases on these millions of acres of lands?

I think you might be confused Buffalo. I created this thread and posted the original question. I know there are similar threads, some started by you.

My Bad, thought I was at: President Bush Lifts Ban on Offshore Drilling

But my question was and is, why do oil and gas companies buy oil and gas leases on lands they claim do not have oil and gas on them? I am just not getting the rational. They have purchased these leases. They continue to purchase theses leases. And they continue to fight like hell to keep from being required to develop and produce oil and gas from these properties that they claim do not have any oil and gas.

If these lands don't have any oil and gas as the industry claims, why spend money on them? Why buy them? What is the rational for buying the oil and gas leases on these millions of acres of lands?

As I said before many of these leases were bought decades ago, and have been explored, so the companies know that there isn't any oil on them.

It isn't that they are now just buying up leases, it is a continuous cycle, from year to year.

The exploration leases as far as I can tell don't expire, or Congress wouldn't be talking about recinding the leases, but if you have a dry lease, it still is your lease, and is still on th ebook as a lease.

Those leases aren't just any land, the lease has to have the potential of producing oil, the companies know what they are looking for, but even then as they get out to the sites they may find that the geology is not what they thought it was.

So they have a lease, but no oil, what does congress want them to do, squat and piss oil, if there is no OIL, they just donated to Congress for nothing, if there is OIL they get to pay royalties to Congress which are passed on to the consumer in the cost of doing business, and everybody gets screwed by Congress.

Oil exploration is still, a lot of by guess and by gosh, and like looking for gold you have to move a lot of dirt to find a pay zone, and that is the whole thing in a nut shell, a lot of looking to find a pay zone, and even in the right areas there is a whole lot more dry than wet zone.

As I said before many of these leases were bought decades ago, and have been explored, so the companies know that there isn't any oil on them.

It isn't that they are now just buying up leases, it is a continuous cycle, from year to year.

The exploration leases as far as I can tell don't expire, or Congress wouldn't be talking about recinding the leases, but if you have a dry lease, it still is your lease, and is still on th ebook as a lease.

Those leases aren't just any land, the lease has to have the potential of producing oil, the companies know what they are looking for, but even then as they get out to the sites they may find that the geology is not what they thought it was.

I mean the whole point to buying an oil and gas lease would be to produce oil and gas and make money or at least that is my thinking. Why would someone do something else, as is the case today?
So they have a lease, but no oil, what does congress want them to do, squat and piss oil, if there is no OIL, they just donated to Congress for nothing, if there is OIL they get to pay royalties to Congress which are passed on to the consumer in the cost of doing business, and everybody gets screwed by Congress.

Oil exploration is still, a lot of by guess and by gosh, and like looking for gold you have to move a lot of dirt to find a pay zone, and that is the whole thing in a nut shell, a lot of looking to find a pay zone, and even in the right areas there is a whole lot more dry than wet zone.

These leases have a 10 year term and annual rents must be paid in addition to a 12.5 percent royalty on any oil and gas produced from the property, per the Bureau of Land Management Web site. The leases can be terminated earlier at the option of the buyer.

So again my question is if you have a lease that is essentially worthless because you cannot do anything with the lease but produce oil and gas from the property. And if there is no oil and gas on the property, why pay for a lease on the property year after year? Why not just surrender the lease to the government? And if there is a possibiltiy of producing oil and gas on the property, why wouldn't you explore the property for oil and gas?

It just seems like a big waste of money to spend money on oil and gas leases and then not explore or drill or do anything to produce oil and gas from the property. And then claim the property has no oil and gas as the oil company CEOs claim.

I am not sure of the answer, but it is possible that there IS oil there, they just don't want to drill it right now, and by leasing it the PREVENT another companies to do so...

I would think at the very least one would do a survey to determine oil and gas potential of the land...rather than continue to pay substancial rents year after year and do nothing.

Substantial is relative. When you are making 5 billion a quarter (pure profit) paying let's say 10 million a year is really nothing... They are not stupid, I am sure there is a reason why they do it. They might just think that statistically speaking, there HAS TO BE oil there, it is just question of how deep they drill...

One thing I found out is that when bidding on a lease, the Government puts together a Block of leases, and you bid on that Block, so there may be a area with oil to be exploited, but to get that area you have to bid for the whole Block, just to get to the area that you want.

That is why there seems to be a whole lot of excess leasing with out exploration.

They know the geological structure they want, that has a likelihood of containing oil, so they do have a idea were to drill, but the way the Lease is done they have to lease a lot of land that isn't even remotely the proper geological structure.

One thing I found out is that when bidding on a lease, the Government puts together a Block of leases, and you bid on that Block, so there may be a area with oil to be exploited, but to get that area you have to bid for the whole Block, just to get to the area that you want.

That is why there seems to be a whole lot of excess leasing with out exploration.

They know the geological structure they want, that has a likelihood of containing oil, so they do have a idea were to drill, but the way the Lease is done they have to lease a lot of land that isn't even remotely the proper geological structure.

That is true in some cases I am sure. However, there are a lot of blocks that sit without exporation or development. Why would the oil industry and Republicans in particular not support a bill that would require these lands be developed or returned to the government?

That is true in some cases I am sure. However, there are a lot of blocks that sit without exporation or development. Why would the oil industry and Republicans in particular not support a bill that would require these lands be developed or returned to the government?

Well you answered your own question, they revert to the Government in ten years, so why do we need legislation for something that happens anyway?

A lot of those blocks aren't leased because the geology is not right for oil to be present.

There are 16,000,000 acres open for exploration, but not all 16,000,000 are leased and not all of the 16,000,000 acres haves the right geology to produce oil.

These leases have a 10 year term and annual rents must be paid in addition to a 12.5 percent royalty on any oil and gas produced from the property, per the Bureau of Land Management Web site. The leases can be terminated earlier at the option of the buyer.

Web site please?

That doesn't sound like the government to me?

And if true, I am willing to bet that any lease that doesn't have oil is returned ASAP.

So again my question is if you have a lease that is essentially worthless because you cannot do anything with the lease but produce oil and gas from the property. And if there is no oil and gas on the property, why pay for a lease on the property year after year? Why not just surrender the lease to the government? And if there is a possibility of producing oil and gas on the property, why wouldn't you explore the property for oil and gas?

Because you signed a contract to lease that property, and to keep getting leases you have top be current in your contracts, meaning that if you don't pay the contract as stipulated for ten years you don't get to bid on anymore leases.

A lease is a Contract between the Government and the Oil Company, and contract have to be honored to the letter by law.

It doesn't matter if you don't find oil, you are still bound by the Contract Lease.

It just seems like a big waste of money to spend money on oil and gas leases and then not explore or drill or do anything to produce oil and gas from the property. And then claim the property has no oil and gas as the oil company CEOs claim.

The leases return to the Government after Ten Years, so after you sign a lease you are stuck with the lease for ten years, after that they go back to the government.

It just seems like a big waste of money to spend money on oil and gas leases and then not explore or drill or do anything to produce oil and gas from the property. And then claim the property has no oil and gas as the oil company CEOs claim.

If there is no oil, because the geology is wrong why waste the money putting down a test well?

Well you answered your own question, they revert to the Government in ten years, so why do we need legislation for something that happens anyway?

A lot of those blocks aren't leased because the geology is not right for oil to be present.

There are 16,000,000 acres open for exploration, but not all 16,000,000 are leased and not all of the 16,000,000 acres haves the right geology to produce oil.

[QUOTE=joepistole;1932172] These leases have a 10 year term and annual rents must be paid in addition to a 12.5 percent royalty on any oil and gas produced from the property, per the Bureau of Land Management Web site. The leases can be terminated earlier at the option of the buyer.

Because you signed a contract to lease that property, and to keep getting leases you have top be current in your contracts, meaning that if you don't pay the contract for the ten years you don't get to bid on anymore leases.

A lease is a Contract between the Government and the Oil Company, and contract have to be honored to the letter by law.

It doesn't matter if you don't find oil, you are still bound by the Contract Lease.

The leases return to the Government after Ten Years, so after you sign a lease you are stuck with the lease for ten years, after that they go back to the government.

If there is no oil, because the geology is wrong why waste the money putting down a test well?

You can terminate a lease early without prejudice if you follow the rules. The rules require you to notify the Bureau and to clean up your site if you messed it up...pretty simple.

But again, why continue with the lease if there is no oil on the property?

[QUOTE=Buffalo Roam;1933145]But again, why continue with the lease if there is no oil on the property?

Now you do the research and prove that they do keep the lease for ten years if there is no oil.

If they can get out of the lease, and there is no OIL they would drop the lease like a hot potato, and I don't know a company that would continue a contract if they didn't have to, if it wasn't paying, the Investors would have the Boards Ass on a Silver Platter.

There is one other reason that they might Maintain the lease ,that would be to run pipelines to on shore storage and shipment facilities.

A lot of oil is piped directly onshore.

That would be the only thing that would make sense to me, you can't just run line over property that you don't own or have a lease for.

But you still haven't provided a link to the Lease information.