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Energy Companies Lose Appeals Court Bid Over Parcel Leasing

A group of oil and gas companies failed to persuade an appeals court to compel the U.S. to issue parcel leases on which they were the high bidders within 60 days of payment.

The U.S. Court of Appeals in Denver said yesterday it lacks jurisdiction over the matter because a lower court’s order was not a “final decision.” U.S. District Judge Nancy D. Freudenthal in Cheyenne, Wyoming, concluded that the secretary of the U.S. Interior Department must decide whether to issue oil and gas leases within 60 days of payment, not necessarily issue the permits within that period, according to yesterday’s ruling.

The Western Energy Alliance claimed Interior Secretary Ken Salazar misread federal law in concluding he has the authority to deny or issue leases within 60 days of payment. The alliance argued the Secretary is required to issue the leases within 60- days of payment.

The Western Energy Alliance is a nonprofit trade association of more than 400 oil and gas companies in the western U.S., according to its website.

Joining the organization in the appeal was Samson Resources Co., an oil and gas company based in Tulsa, Oklahoma, and partly owned by private-equity firm KKR & Co., Baseline Minerals Inc. and Nerd Gas Co.

The appeals court relied on obscure jurisdictional principles to ``avoid ruling on whether a statute that plainly states `Interior shall issue leases within 60 days' means that Interior actually must issue leases within sixty days after receiving payment,'' Kathleen Sgamma, a spokeswoman for the Western Energy Alliance, said in an e-mail. The appeals court specifically didn't rule on the merits of the case, she said.

The case is Western Energy Alliance v. Salazar, U.S. Department of the Interior, 11-8071, U.S. Court of Appeals for the 10th Circuit (Denver).

To contact the reporter on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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