By Paul Foy The Associated Press
Published: May 4, 2005
SALT LAKE CITY (AP) – A tiny oil company has snapped up leasing rights to a half-million acres in central Utah that it says could yield a billion barrels or more of oil.
Geologists are calling it a spectacular find – the largest onshore discovery in at least 30 years, located in a region of complex geology long abandoned for exploration by major oil companies. It’s turning out to contain high-quality oil already commanding a premium at refineries.
With the secret out, industry players expect a bidding war to break out at the next Utah leasing auction, set for May 17 in Salt Lake City.
At today’s prices the oil reserve could bring Utah $5.6 billion in royalties, state auditors conservatively estimate. Although the discovery is still playing out, the oil will take years to recover and some skeptics question the company’s projections for a region yet to be fully surveyed.
“It’s just very highly unlikely because the U.S. onshore has been picked clean, if you will,” said Fadel Gheit, senior oil analyst at Oppenheimer & Co. in New York.
“That’s like finding a wallet in the subway after all the cleaners went through it. It’s possible, but very highly unlikely,” he said.
