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Purchasers of 5M acres in southern Wyoming see potential for expanded renewable energy development

Purchasers of 5M acres in southern Wyoming see potential for expanded renewable energy development

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Turbines

A row of wind turbines spin along the Shirley Basin north of Medicine Bow on Aug. 8, 2019. The winning bidders for 5 million acres of land in southern Wyoming say there is potential to expand renewable energy efforts there.

The new owners of 5 million combined acres of land and mineral rights in southern Wyoming say they plan to pursue opportunities to expand renewable energy development in addition to existing drilling and mining activity — a potential new source of revenue for the state as a third-party investment company takes over land long held by oil companies Anadarko and Occidental Petroleum.

In a Friday interview with the Star-Tribune, Jon Lamb, the CEO of the purchasing firm Orion Resource Partners, and Johnny DeCooman, the new CEO of Sweetwater, the company taking over management of those lands, said they would be looking into opportunities to diversify the region’s already productive sources of trona and oil into other arenas, including wind, solar and potential rare earth extraction, in an effort to boost the long-term profitability of their $1.33 billion purchase.

“One of the things that attracted us today to this portfolio on the surface was the opportunity for renewables development,” Lamb said. “There is clearly a demand for that with a couple of large transmission projects that are currently underway. … I really see that as just surface being scratched. We’re excited to get the transaction closed and started looking at how to best advance those opportunities.”

Orion — an international mining company specializing in leasing large swaths of land for mining and development — was the successful bidder in a highly competitive sale of the land earlier this year, beating out the state of Wyoming in a nine-way race to purchase the acreage.

That land, which was part of the land grant that helped build the nation’s first transcontinental railroad, is considered one of the world’s largest sources of trona and has proven to be a reliable source of oil revenues over the years despite changing hands several times throughout its history.

Those revenues, plus the potential of getting even greater use out of those lands, ultimately compelled Orion to outbid Wyoming by hundreds of millions of dollars to close the deal and potentially open the door to even greater development opportunities in the long term.

“Royalties of this scale with the underlying quality these assets have is quite rare,” Lamb said. “And to have an opportunity to acquire those is unique, let alone having one in a great local jurisdiction with great local partners and a lot of option value, just given the size of the land package and the mineral package. And really, all of the current cash flow is being generated from a just fraction of that.”

“We’re long-term investors, and this is a long-term business we’re setting up here,” he added.

Sweetwater’s entry in the market also means the likelihood of continued payments in lieu of taxes to local governments in the region — a major concern for municipal leaders as news of the deal first broke earlier this year. While no plans are set in stone yet, DeCooman said the company plans to begin an outreach effort with local officials and current lessees shortly after the deal closes.

The sale is expected to occur on or around Oct. 19.

Friday’s interview comes just days after a contentious post-mortem of the deal among members of the Wyoming Legislature’s Select Committee on Capital Financing & Investments, where Treasurer Curt Meier chided lawmakers for not involving his office in evaluating the land back in the fall and said that he had lingering concerns about the prospects of an overconcentration of trona in the state’s investment portfolio. (Occidental did not approach the state about the land until January, Rep. Bob Nicholas noted, with the bidding process not announced until March of this year.)

While Wyoming missed the boat this round, Meier said that the process could be seen as a teaching experience that could help the state in future land purchasing scenarios.

“I think there are going to be other opportunities like that, whether in real estate or other areas,” he told committee members.

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Politics Reporter

Nick Reynolds covers state politics and policy. A native of Central New York, he has spent his career covering governments big and small, and several Congressional campaigns. He graduated from the State University of New York at Brockport in 2015.

Related to this story

  • Updated

Wyoming's bid to purchase 5 million combined acres of land on Wyoming's southern tier has been put on hold after its owner, Occidental Petroleum, announced it would be moving forward with another bidder.

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