Minerals Management
The Minerals Management Bureau is responsible for leasing, permitting, and managing approximately 4,160 oil and gas, metalliferous and non-metalliferous, coal, and sand and gravel agreements on 6.2 million acres of school trust lands and approximately 1,800 acres of other state-owned land throughout Montana.
2007 Fiscal Year Minerals Management Bureau Annual Report (pdf)
2006 Fiscal Year Minerals Management Bureau Annual Report (pdf)
2005 Fiscal Year Minerals Management Bureau Annual Report (pdf)
2004 Fiscal Year Minerals Management Bureau Annual Report (pdf)
Mineral Leasing
The mineral leasing program is responsible for reviewing and processing all mineral lease and permit applications; advertising, competitively bidding, and issuing new leases; reviewing and approving lease assignments; and collecting, verifying, and posting lease rentals and production royalties.
Oil and Gas Leasing 
The mineral leasing program is responsible for the leasing and monitoring of 4,023 oil and gas leases, 578 of which are currently productive. The number of oil and gas leases managed is up 21.9 percent, while the number of currently producing leases increased by 0.5 percent, compared to FY 2005. Activities related to existing leases include collecting, verifying, and posting rental, royalty, delay drilling and shut-in payments; reviewing and approving assignments and tracking working interest ownership; reviewing and preparing for approval communitization agreements and unit operating agreements; and coordinating with field offices the review and approval of all proposed physical operations on state leases. In addition, four oral auctions of new oil and gas leases are prepared and conducted each year.
Other Mineral Leasing
The mineral leasing program also administers a wide variety of leases - including metalliferous and non-metalliferous leases, coal leases, gravel permits and leases, and land use licenses for non-mechanized prospecting - for all other mineral activity on state trust land. In FY 2006, 4,079,399 tons of coal were mined, which is a 9.7 percent increase in production over FY 2005. The average price per ton increased 2.6 percent from FY 2005 for an average price of $8.63 per ton. Royalties decreased1.4 percent compared to FY 2005. The volume mined can vary significantly from year to year, as mining activity moves onto or off state land within the normal sequence of mining operations. Royalties and rentals are also collected for minerals such as bentonite, clay, gold and associated minerals, peat, and shale.
Royalty Auditing and Accounting
The royalty audit program provides additional revenues as a result of programmatic audits. The program identifies royalty under- and over-reporting, rectifies discrepancies, and raising the level of voluntary compliance. Most audits have a single payor and involve multiple leases.
In FY 2006, audit activity remained steady and continued to reflect improved levels of compliance. Three audits were completed with assessments totaling $113,615. An additional 13 audits are in progress, four with preliminary assessments of amounts due ranging from $3,862 to $621,422.
Riverbed Leasing
Minerals Management Bureau continues its efforts to clarify title to the beds and islands of navigable rivers. The state owns, pursuant to statute, those lands below the low-water mark, islands and their accretions formed in the riverbeds after statehood, and abandoned channels formed by avulsion (Click Here for more information and a list of Navigable Waterways.) Because two navigable rivers in Montana flow through areas with major oil and gas resources, the department has conducted numerous riverbed studies to determine and document state ownership of land. This process allows the state to take a progressive position in issues involving substantial royalty dollars.
In FY 2006, the program managed 17,8.4 acres of leased riverbed and island tracts. These tracts provided the state with $851,061 in oil and gas revenues while generating an additional $697 from other mineral leasing activity. This same ownership review process is also becoming increasingly important in areas where surface development and/or use encounters beds, islands, and abandoned channels of navigable rivers. The department continues to work with state, Federal, and private entities whenever ownership issues arise.
Otter Creek Tracts
Great Northern Properties and the DNRC completed the Otter Creek Property Summary Report. The report incorporates existing and newly acquired coal data to produce a detailed analysis of the coal resource for potential development. The value of the Otter Creek tracts lies in their potential for coal development. Preliminary estimates attribute some 500 million tons of coal reserves to the state's existing and acquired mineral estate.
