DENVER (AP) - Teapot Dome, the Wyoming federal oil reserve that was at the root of a 1920s political scandal, is up for sale, this time to the highest bidder to make sure the deal is legitimate.
The U.S. Department of Energy has hired Denver-based Meagher Energy Advisors to sell the Naval Petroleum Reserve No. 3, known as the Teapot Dome.
In 1922 and 1923, Albert B. Fall, President Warren G. Harding’s secretary of the interior, leased Navy petroleum reserves at Teapot Dome, near Casper, and in California in low, no-bid contracts.
Fall was convicted of taking bribes from the oil companies that received the leases, and the leases were returned to the Navy in 1927.
Among the oilmen involved in the scandal were Denver businessmen Albert Edmund Humphreys and Henry “Harry” Blackmer.
The tycoons paid Fall and also newspaper publishers - including Frederick G. Bonfils of The Denver Post - to keep quiet.
When Humphreys was ordered to testify before a congressional committee investigating the scandal, he committed suicide at his Grant-Humphreys Mansion in Denver.
The 9,500-acre oil field, which produced 28 million barrels, still has 300 million barrels of oil in place, said Meagher Energy President Matt Meagher.
“Of course, not all that is recoverable,” he said. “It is a good candidate for enhanced oil recovery.”
Operators probably would pump carbon dioxide gas into the field to boost production.
Teapot Dome, about 30 miles north of Casper, has been home to the Rocky Mountain Oilfield Testing Center, which works with academic and industry researchers on new technologies.
The Teapot Dome sale process will begin this summer. The highest bidder will be selected in a competitive, sealed-bid process in the fall.
Bidders probably will have to send a single, best-offer bid.
“Everyone will get one shot at the apple,” Meagher said.
“We are pleased to have Meagher advising the DOE in the sale,” Cheryl A. Thompson, business manager for the department in Casper, said in a statement. “Meagher’s technical knowledge and oil and gas transactional experience will be critical in a successful disposition.”
In 2012, Meagher successfully leased the former Lowry Bombing Range, a 21,000-acre parcel on the edge of Denver, for the Colorado State Land Board.
ConocoPhillips purchased the lease for a $137 million bonus payment and an 88-well commitment estimated to generate $500 million in royalties for Colorado K-12 public schools.
“The success at Lowry is probably one of the reasons we got Teapot,” Meagher said.
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Information from: The Denver Post, https://www.denverpost.com
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