Oil-and-gas auction turns into a gusher

Bidding by oil-and-gas players intensified Tuesday at a government auction as a rich oil find in central Utah sent prices soaring over $1,000 an acre.

Fresh off news that Wolverine Gas & Oil Corp. discovered what could be a huge oil field, the company deployed clandestine bidders to foil speculators and pad its holdings on public lands with oil and gas potential.

"When I come to an auction like this, I know I'm being followed," said Wolverine president and chief executive, Sidney J. Jansma Jr. "We are very pleased with our discovery. Who wouldn't be? Just how much oil is there is anybody's guess."

Grand Rapids, Mich.-based Wolverine already is pumping oil as fast as it can near Sigurd,130 miles south of Salt Lake City, after tapping a single oil deposit believed to contain 100 million to 200 million barrels of oil.

Wolverine has said it was looking at 25 deposits across an area about 90 miles long by 40 miles wide that could contain a billion barrels of oil, but Jansma downplayed that prospect Tuesday, saying those figures are speculative.

Wolverine is working a region long abandoned for exploration by major oil companies more than 100 miles from any other major oil field in Utah.

"It was a true wildcat — a very risky well," said Bill Armstrong, president of Armstrong Oil & Gas Inc., Denver, an active bidder at Tuesday's auction. He said the bidding was "absolutely" driven by a find Wolverine managed to keep secret for only a year after hitting pay.

The bidding was intense on large parcels in central Utah, pushing starting prices of $2 an acre to as much as $1,250 an acre.

"It's just getting very competitive," said Clint Turner, a land agent who placed that top bid on an 880-acre parcel. Turner, of Sandy, said he was representing oil companies from outside Utah.

The most expensive bid was placed by a Utah investment group called Moose Mountain Minerals, which paid $1.42 million for a lease on 1,461 acres closest to Wolverine's find.

In all, the Bureau of Land Management leased 137 parcels totaling 232,257 acres Tuesday. A BLM fact sheet says rising oil and natural gas prices and promising discoveries have pushed Utah into a "leasing frenzy."

The auction raised $13.4 million, half of which goes to Utah.