In a move to stimulate oil and gas development in Utah, the Board of State Lands and Forestry has signed off on a proposal to lease certain parcels of oil, gas and hydrocarbon lands at an 81/3 percent royalty rate.
The new rate takes effect Oct. 4 and runs until Oct. 3, 1990, for lands offered for leasing, which have not been leased since October 1986. The land, estimated at more than 3 million acres, would be available through a bidding process and not leased over-the-counter, a spokesman said."We hope this adjustment will increase the acreage under lease and thereby increase revenue for the state trust lands," said Ed Bonner, State Lands and Forestry manager.
State officials last April reduced the general royalty rate from 162/3 percent to 121/2 percent and Bonner said the change resulted in a "significant increase in (leasing) activity."
In one month after the change, the state received more rental fees than it did in all of last year, the spokesman said. Royalties are collected if the land is developed.
Falling oil prices have caused a sharp drop in Utah oil and gas acreage under lease since 1982.