Oil, gas search pays off for Oregon

The search for oil and natural gas in Oregon is becoming a financial bonanza for the state. More than $3 million has been paid into the state treasury so far this year in bonus payments by oil companies and leasing agents who act for others for the right to lease stateowned acreage for drilling.

The payments were made during the course of two auctions this year of leases on state lands, and a third auction for 1980 is now planned for next October by the Oregon Division of State Lands. A bonus payment is an amount per acre offered by a bidder seeking a particular tract of land over and above the required annual payment to the state under terms of the lease.

In addition to bonus and annual lease payments there also will be royalties to the state if and when oil or natural gas is found on any acreage leased from the state.

A few weeks ago a record high bonus of $287 an acre was paid on a 640-acre tract by a firm in Bakersfield, Calif., acting for a group which included Occidental Petroleum company of Los Angeles. The Bakersfield firm, Nahama & Weagant Inc., paid a total bonus of $919,500 to obtain lease rights on 4,500 acres in all in Clatsop County adjacent to the area where natural gas now is flowing in Columbia County.

Gulf Oil Corporation, one of the nation's major oil firms, also was successful in the April 29 auction, obtaining two leases, each on 640 acres in Clatsop County, on which the total bonus payment was $214,400.

But not only the state profits when state-owned lands are leased. The county where the acreage is located also benefits. In the April 29 auction, for example, Clatsop County, by law, received 63.75 percent of that day's bonus payment, or more than $900,000.

Columbia County, where Oregon's gas-producing wells are located, is a special instance of gain from the oil and gas search. Years ago, after the county had reclaimed various lands for nonpayment of Taxes, when that land subsequently was sold to private owners, the County retained the title to any minerals that might later be found. Columbia County, as a result, has received royalty payments since discovery of natural gas at Mist totaling $63,000.

Since the first discovery well in May 1979 there have been 53 drilling permits issued, and at the Oregon Department of Minerals and Geology it is expected that a substantial number of permit applications will be received over the next few weeks, mainly the result of the two auctions held this year.

Just recently natural gas from Oregon's Mist field began flowing for the first time to household customers.