The Teapot Dome Oilfield now belongs to Stranded Oil Resources Corp. (SORC), the company said Jan. 30.

The purchase may be historic, but it was also about hundreds of millions of barrels of oil.

The company bought the last remaining property of the Naval Petroleum and Oil Shale Reserves program created in the early 1900s. The Austin, Texas, company paid $45.2 million.

The U.S. Department of Energy (DOE) retained Meagher Energy Advisors to sell the field, designated Naval Petroleum Reserve 3 (NPR-3). The DOE offered all rights, title and interest in the field.

The field is linked to a 1920s scandal that led to the first cabinet member, U.S. Interior Secretary Albert Fall, serving prison time. The secretary arranged to lease the land to oil companies without competitive bidding.

This time the purchase was the culmination of a competitive bidding process that closed on Oct. 16.

“We are honored to have been awarded the contract to sell an oilfield as historically and economically significant as Teapot Dome. We were committed to delivering the best possible value to the DOE,” said Matthew E. Meagher, president and CEO of Meagher. “It is an asset with a significant amount of remaining reserves and is an excellent candidate for enhanced oil recovery technologies. The combination of these attributes and the size of the asset generated nine bids.”

NPR-3 is an oil and gas field 35 miles north of Casper, Wyo., created by presidential order in 1915. The historic field lies along the southwestern edge of the Powder River Basin and has produced 28.5 million barrels (MMbbl) of oil with an estimated 300 MMbbl in place.

The major producing formations of the field are the Cretaceous aged Shannon Sandstone, Steele and Niobrara shales, Second Wall Creek (Frontier) and Pennsylvanian Tensleep.

Under the terms of the sale, operation and ownership of all NPR-3's mineral rights and roughly 9,000 acres of land will be immediately transferred to SORC. Remaining surface acreage is set to be transferred in May, bringing the total acreage to 9,318.

The acquisition of NPR-3 aligns with SORC's core strategy of acquiring and redeveloping mature oil fields, said Mark See, president and CEO of SORC, in a statement.

"By targeting properties with known characteristics, we reduce the uncertainty and risk generally associated with oil exploration. NPR-3 was used for a variety of research and development projects while under the ownership of the U.S. government and the quantity and quality of the data on the field is impressive. We are excited about the opportunity to develop the field under commercial operations," he said.

Co-located with NPR-3 is the Rocky Mountain Oilfield Testing Center (RMOTC). Established in 1994, RMOTC utilizes NPR-3’s resources and facilities in order to assist the U.S. oil and gas industry, researchers and academia in the field validation of new technologies through shared cost arrangements.

SORC is an indirect, wholly owned subsidiary of New York City-based Alleghany Corp. (NYSE: Y). Alleghany was founded in 1929 as a railroad holding company and over the following decades diversified its interests to include finance, insurance, mining, transportation and steel production. Its subsidiary, Alleghany Capital Corp. (ACC), engages in and oversees its strategic investments and acquisitions.

David Van Geyzel, president and CEO of ACC, said in a statement, "Purchasing mature oil fields that fit its acquisition criteria is a key component of SORC's growth strategy during both industry up-cycles and industry down-cycles. We look forward to supporting SORC as it pursues the development of this unique, long-term asset."

Meagher, located in Greenwood Village, Colo., is focused on oil and gas asset divestitures in the upstream and midstream sectors with transactions of up to $2 billion.

Laredo Oil Inc. (OTC: LRDC) assisted SORC with the purchase, the company said. Laredo, also based in Austin, Texas, is a management services company managing the acquisition and conventional operation of mature oil fields.

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