Federal Oil and Gas Lease Sale Generates $38 Million for Montana, North Dakota

BILLINGS, MT — A competitive federal oil and gas lease sale generated more than $38 million in revenue from 23 parcels covering 7,604 acres in Montana and North Dakota, the Bureau of Land Management announced following the September 10 sale.

Phoenix Energy One LLC dominated the auction, securing 12 parcels for nearly $30 million, while Kraken Oil & Gas LLC won five parcels for $5.9 million. The remaining parcels went to smaller operators, with individual lease prices ranging from $507 to more than $10,000 per acre.

“This sale is a clear signal that investors and communities alike believe in the future of American energy,” said Acting BLM Director Bill Groffy. “By unlocking these resources, we are not only driving revenue back to Montana and North Dakota but also supporting jobs and reinforcing our nation’s ability to remain energy independent for generations to come.”

The sale included 14 parcels totaling 4,722 acres in Montana and nine parcels covering 2,883 acres in North Dakota. Proceeds from the auction are shared between the federal government and the two states, providing funding for local communities and public services.

Industry Interest Driven by Technology Advances

The strong bidding reflects increased industry confidence in the region’s energy potential, driven partly by advances in drilling technology. The BLM noted that significantly improved well economics through three-mile lateral drilling technology in the Bakken and Three Forks formations of eastern Montana have made development more attractive to operators.

Phoenix Energy One’s largest purchase was a 1,800-acre parcel in Richland County, Montana, for $7 million, while the company’s highest per-acre bid reached $9,112 for a 440-acre North Dakota tract. The competitive bidding suggests strong industry confidence in the region’s long-term energy production potential.

Policy Changes Support Development

The lease sale was conducted under the One Big Beautiful Bill Act, which reduced the federal onshore royalty rate from 16.67% to 12.5%, making oil and gas development more economically attractive to industry. The legislation, signed by President Trump in July, requires four annual onshore lease sales in top oil and gas producing states, including Montana.

U.S. Senator Steve Daines praised the sale results, calling them evidence of the Trump administration’s commitment to Montana energy development.

“The announcement from the BLM shows that President Trump’s administration is committed to commonsense policies that are in the best interests of Montana energy,” Daines said. “The BLM has focused on expanding America’s energy dominance, which benefits Montana’s economy and provides well-paying jobs for our communities.”

Comprehensive Review Process

The lease sale followed an extensive public review process that began in January with a 30-day public scoping period. The BLM published an environmental assessment for public comment in March, issued the sale notice and protest period in July, and signed the final decision in early September.

All offered parcels included appropriate stipulations to protect natural resources, and the environmental review found no significant environmental impact from the proposed leasing.

Leasing Timeline and Next Steps

The 10-year leases can be extended as long as oil and gas production continues in paying quantities. However, leasing represents only the first step in energy development. Before any drilling can begin, operators must submit detailed development plans and receive additional permits from the BLM.

This single sale’s revenue exceeded the BLM’s entire national energy and timber receipts from the previous quarter, highlighting strong industry demand for federal energy resources. The results demonstrate continued momentum for Montana’s energy sector under current federal policies that prioritize domestic energy development.

The sale attracted eight different companies, showing broad industry interest in Montana and North Dakota energy development opportunities. Oil and gas leases provide significant economic benefits to rural communities through job creation, increased tax revenue, and royalty payments to landowners.