The Mobile County Board of School Commissioners agreed to lease a parcel of its 16th section land in a five-year lease for “oil and gas exploration” that will bag the system a minimum of $101,000.
Tommy Sheffield, the executive facilities manager for the Mobile County Public School System, said a bid package for five “16th section properties” was prepared by Regions Bank, which the system uses as its natural resource contractor. J-Brex of Alabama LLC bid on a more than 640-acre property in Citronelle to the tune of $159 per acre, the highest bid the system received.
“This gives them a five-year time frame to go out on this property and explore or mobilize,” Sheffield said. “If they find oil or gas, we a guaranteed a percentage from the royalties of what ever they put into production and pump.”
During the special-called meeting, Superintendent Martha Peek said system would be guaranteed 1/4 of any royalties received during the five-year lease. However, Sheffield said the company would have to come back to the board for approval to move forward with any extraction, if the company does indeed find oil or gas on the property.
Each of the five parcels of land bid for exploration is more than 640 acres in size. Sheffield said the majority of those are “in the north side of the county.” However, the Citronelle property was the only parcel that received a bid.
“(Regions) had some exploratory people on some of their other properties,” Sheffield said. “As our representatives, they package the bids and put it out there. If these guys are in the neighborhood, why not bring them to our property?”
The board owns and manages several “16th section of lands” throughout Mobile County, which were given by the federal government to Alabama when it became a state. The State Legislature then gave control of the land in Mobile to the public school system and the University of South Alabama in 1969 and 1973, respectively.
Those lands make up a significant portion of system’s 22,000 acres of property. Of that property, 18,000 acres are used for timber production, the sale of which brings in nearly $3 million in annual revenue for the Mobile County Public School System, according to Sheffield. Regions Bank also manages the system’s day-to-day timber operations. Sheffield has previously said the total value of the MCPSS’s timber is around $20 million.