During the September 26th meeting of the State Land Office Oil & Gas Advisory Board, representatives of the State Land Office informed the board members about an upcoming change to their policy regarding purchases of caliche from State Trust lands.

Currently, the rate for caliche purchased from pits on State Trust lands ranges from $1.25 to $3.00 per loose cubic yard. According to the State Land Office, BLM currently charges $3.75 per loose cubic yard. Therefore, in order to achieve parity with BLM, the State Land Office will begin charging a fixed rate of $3.50 per loose cubic yard for caliche purchased from state-owned pits effective November 1, 2013.

Area operators need to be aware of this policy change since, in certain circumstances, this change will represent a substantial increase (up to 180%) in the cost typically passed through to the operator by the vendor for road and location building materials.