How a Burmese immigrant profited by flipping cheap oil leases from Trump
auctions
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[March 22, 2021]
By Nichola Groom
(Reuters) - A Myanmar-born U.S. perfume
entrepreneur became a curiosity last year when she became the nation’s
top buyer of oil-and-gas leases at the Trump administration's federal
auctions, despite having no apparent energy background.
Since July, Levi Sap Nei Thang has spent about $3.7 million on nearly
300 government leases covering 133,000 acres in 12 states. She told
Reuters at the time that she was keen to produce oil on the parcels.
A Reuters examination of her dealings reveals she pursued a different
strategy: selling the leases to other Burmese immigrants at inflated
prices after billing them as great investments on social media,
according to interviews with seven buyers and others familiar with her
business, along with sales agreements and leasing documents they
provided.
Reuters confirmed four cases in which Thang sold one or more drilling
leases to Burmese immigrants for prices ranging from one-and-a-half to
13 times what she paid. Thang made nearly $335,000 in the cases reviewed
by Reuters, buying the leases for about $215,000 and selling them almost
immediately for more than $550,000.
Three of Thang’s buyers told Reuters they had met many others who
described themselves as buyers of her leases, but Reuters could not
determine the full scope of Thang’s lease sales, which are private
transactions. In October, Thang invited dozens of buyers to Wyoming to
meet her and tour their parcels, according to a buyer who attended.
Photos and videos posted on her Facebook page show her with groups of
smiling people in windy, cold weather. Thang told the buyers they were
more like her “friends, siblings and families,” one video shows.
Federal and state records show Thang has not transferred ownership of
the drilling rights to the four buyers who told Reuters they purchase
leases from her. Thang’s company is still listed as the owner of those
parcels in government records. Of the nearly 300 leases Thang won at
state and federal auctions, only two have been reassigned, both to the
same new owner, according to a Reuters review of state and federal lease
registries.
In order to transfer ownership of a lease, both buyer and seller must
submit a signed form to the state or federal land office. Reuters could
not ascertain why Thang’s company continued to be listed as the owner of
parcels that buyers said they had bought from her and paid for.
In the biggest sale confirmed by Reuters, the owner of a sushi business
in Texas, Tha Cin, gave Thang $510,000 in multiple payments last year
for two leases in New Mexico that Thang had bought that summer for about
$200,000, according to Cin and her lawyer, copies of the sale
agreements, and lease records.
Despite Cin’s purchase agreements with Thang, dated in early September,
federal and state leasing documents still showed Thang’s company as the
owner of the parcels as of Friday. That surprised Cin’s lawyer, Jeff
Vaughan.
Cin said she was moved by Thang’s spiritual references in Facebook
videos. “All our money was taken by the person who we believed and
trusted, who talked about God all the time,” she said.
Three other buyers told Reuters that they have asked Thang to return
their money. One said she got her money back and another said he got
only a portion back.
Thang and her lawyer did not answer Reuters’ questions about her
oil-and-gas lease dealings. But Thang on March 8 issued a statement on
her website saying: “Everyone who purchased from me did so by their own
will. I have the right to sell to who I want to, when I want to, and for
what price I set.”
Thang’s lease-flipping illustrates vulnerabilities in the U.S.
government's oil-and-gas leasing program, which generates public revenue
from development on federal lands. The problem: Minimum bid requirements
are $2 an acre, a level that has not been lifted in decades, making it
easy for speculators with no intention to drill to secure acreage at
deflated values in times of low demand, then resell at a profit.
Thang purchased about a quarter of all the federal acreage sold between
August 2020 and January 2021, according to government data. (For
graphics on Thang's lease-buying, click https://tmsnrt.rs/2NDaHvg and
https://tmsnrt.rs/3f1RyhT)
Critics of the low bid requirements say that raising them would deter
speculators and raise more revenue for public coffers.
"They are getting like a bargain-basement IPO on our natural resources,"
said U.S. Representative Katie Porter, a Democrat from California, the
new chair of the House Natural Resources Subcommittee on Oversight and
Investigations. Porter has submitted a bill to raise minimum bids to $5
per acre.
The Trump administration sought to maximize domestic oil-and-gas
production by offering as much federal land as possible - more than 26
million acres over four years. But due to low demand for leases, driven
by low oil prices, only about a quarter of the acreage sold, driving
lease prices to rock bottom.
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The sun sets behind a crude oil pump jack on a drill pad in the
Permian Basin in Loving County, Texas, U.S. November 24, 2019.
REUTERS/Angus Mordant
The U.S. Department of the Interior, which manages the lease
auctions, declined to comment on the risks of speculation in the
leasing program.
The oil-and-gas industry rejects the argument that the leasing
program’s low-minimum bids lure speculators, and believes raising
minimum bids would deter investment from oil firms. One trade group
said the Biden administration should simply revoke Thang’s leases
because she is not a U.S. citizen.
“It’s a simple fix to a rather bizarre case that says nothing about
the broader leasing program,” said Kathleen Sgamma, president of the
Western Energy Alliance.
Thang, a permanent U.S. resident, used a U.S.-registered company to
buy her leases, which is permitted under the federal leasing
program.
President Joe Biden last month suspended new leasing auctions
pending a comprehensive review of the federal drilling program. The
review will weigh the environmental costs of developing fossil fuels
against the public revenue it provides.
Spokespeople for Trump and for Biden’s White House did not respond
to requests for comment.
‘I WILL BECOME RICH LIKE HER’
Thang immigrated to the United States 20 years ago. She has since
become a minor celebrity in the Burmese immigrant community,
describing herself on Facebook as a devout Christian, a successful
businesswoman, and a philanthropist. Her followers include many
refugees from Myanmar fleeing military abuses against ethnic
minority groups. The United States has taken in about 175,000
Burmese refugees since 2007, U.S. government data shows.
Thang started snapping up cheap oil-and-gas leases last summer and
marketing them to the more than 600,000 followers of her Facebook
page. In videos, Thang told her followers that they could make
enough money with oil leases to abandon making sushi, a common
profession among Burmese immigrants.
Texas sushi entrepreneur Cin was among Thang’s first buyers. In
June, she contacted Thang, who convinced Cin to invest $510,000 -
her life savings - in New Mexico acreage, she said.
“She also told me to quit my job, my sushi business, and come live
in New Mexico because I will be making between at least 3,000 to
4,000 barrels per day,” said Cin.
She said Thang told her she would “become rich like her, travel
around the world, do missions together.”
‘SOMETHING WAS WRONG’
Cin grew suspicious after visiting the acreage in September, guided
by a relative of Thang’s, who couldn’t answer most of her questions.
“I felt like something was wrong,” Cin said.
She found out later that Thang had acquired the acreage for just
$200,000.
Two Burmese immigrants living in Michigan - Andrew Sang and an
acquaintance who asked not to be named - told Reuters they had a
similar experience.
The pair paid Thang about $47,000 in July for two Wyoming parcels
after seeing her Facebook posts, they said. Thang had bought the
leases that same month for less than $12,000, according to Wyoming
state records.
At the time, abysmal market conditions were causing established
drillers to flee Wyoming. The state lease registry still listed
Thang’s company as the owner of the leases as of Friday.
During the Wyoming meetings with buyers, Thang said that major oil
companies had agreed to meet the group in 2021 to discuss drilling
their leases, said Sang, who attended the tour. Thang, he said, made
it seem like “everyone would become millionaires.”
Sang said that he agreed to buy a second lease from Thang during the
tour, this one on 80 acres of land in his home state of Michigan. He
said Thang described it as "a present" because it would cost him
just $5,000. Thang had bought the lease at a September federal
auction for $450 - the minimum price of $2 an acre plus transaction
fees, records show.
Sang said he got all but $100 of his $5,000 back for the Michigan
lease after confronting Thang. But Sang has not been able to get his
money back for the Wyoming leases for reasons he said Thang has not
made clear.
(Reporting by Nichola Groom; editing by Richard Valdmanis and Brian
Thevenot)
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