Montana oil lease sale could mark Bakken expansion

October 25, 2012

Billings Gazette

By Matthew Brown of the Associated Press

Pioneer Drilling rig number 43 drills recently into the Heath formation near the Bakken formation. Phot by LARRY MAYER/Gazette Staff

A Texas company has bought oil and gas leases on almost 75,000 acres in northeast Montana's McCone County in a move that could portend a significant westward expansion of the Bakken oil patch, government officials and a company representative said Wednesday.

San Antonio-based Donco Inc. paid more than $13.5 million for the leases in a competitive auction held Tuesday by the federal Bureau of Land Management. It marks one of the largest federal lease acquisitions by a single company in Montana in recent years, BLM spokesman Kristen Lenhardt said.

Donco is the parent company of Shale Exploration LLC.

Shale Exploration President Sam Tallis said Wednesday that the company aims to amass leases on roughly 200,000 acres in McCone and neighboring Garfield counties. He said drilling could begin next year.

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