Massive Wyoming land deal put on hold

CASPER — 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.

The news, which was confirmed in a Tuesday afternoon press release from Gov. Mark Gordon’s office, comes just hours after Occidental Petroleum held its quarterly earnings call with investors, in which CEO Vicki Hollub announced it would be moving into negotiations with an unnamed bidder.

“We’re working on due diligence and a purchase of sale agreement with the bidder we’ve selected,” Hollub told shareholders Tuesday morning.

As it turned out, that bidder would not be Wyoming, which was reportedly looking to invest upwards of $1 billion of its investments into the trona and mineral-rich lands in a “checkerboard” in the southern portion of the state.

According to a statement by Gordon’s office, the announcement by Occidental is not final and at this point the conditions of Wyoming’s bid will not be released until there is a final sale or Wyoming withdraws its bid. The timeline for that is quick, however: in Tuesday’s earnings call, Hollub confirmed the company was looking to close on a sale sometime near the end of the third quarter of this fiscal year.

“I thank everyone who has supported this bid and provided feedback as we pursue this bold opportunity, which could be the biggest land purchase in state history,” Gordon said in a statement. “We believe our bid positions Wyoming to generate additional investment revenue and would keep taxes low into the future. I greatly appreciate the willingness of Occidental to work with the State of Wyoming as a bidder.”

The announcement comes amid an effort by Occidental Petroleum to divest $2 billion in property by the end of this fiscal year as the company faces dramatic losses in valuation this year. According to a financial statement released by the company on Monday, Occidental has experienced impairment charges of $6.6 billion this quarter alone, with most of the hit coming from lagging performance in oil and natural gas.

While some, Hollub said, have tried to take advantage of the company’s financial state, the company has continued to seek the highest possible bids for its real estate as it continues to liquefy its assets, particularly given the potential for a future rebound in minerals. An $87 million bid on an Occidental parcel in Utah earlier this year, for example, was structured to cost the buyer $67 million up front, with an additional $20 million payment conditional on a rebound in oil prices, Occidental officials said Tuesday.

“While we’ve had some companies that have tried to be opportunistic with us in terms of our divestitures and trying to get our assets at a discount, we’ve discarded those and moved to the more serious bidders,” she said. “Some of those more serious bidders are working more diligently with our divestitures, but the problem they’re having is putting their models together and getting more comfortable with what the pricing environment will look like.”

While the apparent loss in the bidding process was seen as a blow to its supporters in state government, the Powder River Basin Resource Council — which has expressed skepticism of the land deal and have been critical of a perceived lack of transparency in how it has been carried out — praised the decision in a news release sent to its members Tuesday.

“This so-called ‘bold bid’ looks more like we may have averted a bold blunder,” board member Bob LeResche said in a statement. “We hope that now our government can concentrate on its real job, such as diversifying our economy, slowing the plunge in our revenues, and revising our unsustainable tax structure. And we hope that the managers of our assets can improve their returns without resorting to further unconventional investments like ‘the biggest land purchase in state history.’”