How a Burmese immigrant profited by turning low-cost oil leases from Trump auctions

( Reuters) – A Myanmar-born U.S. fragrance business owner ended up being a curiosity last year when she became the nation’s top purchaser of oil-and-gas leases at the Trump administration’s federal auctions, despite having no evident energy background.

FILE PHOTO: The sun sets behind a petroleum pump jack on a drill pad in the Permian Basin in Loving County, Texas, U.S. November 24,2019 REUTERS/Angus Mordant

Since July, Levi Sap Nei Thang has actually spent about $3.7 million on nearly 300 government leases covering 133,000 acres in 12 states. She informed Reuters at the time that she was keen to produce oil on the parcels.

A Reuters assessment of her negotiations reveals she pursued a various strategy: offering the leases to other Burmese immigrants at inflated rates after billing them as great financial investments on social networks, according to interviews with 7 purchasers and others acquainted with her service, along with sales arrangements and leasing files they provided.

Reuters verified four cases in which Thang offered several drilling leases to Burmese immigrants for rates varying from one-and-a-half to 13 times what she paid. Thang made nearly $335,000 in the events evaluated by Reuters, purchasing the leases for about $215,000 and selling them nearly right away for more than $550,000

3 of Thang’s purchasers told Reuters they had actually satisfied numerous others who described themselves as purchasers of her leases, but Reuters might not determine the complete scope of Thang’s lease sales, which are personal transactions. In October, Thang invited dozens of buyers to Wyoming to satisfy her and tour their parcels, according to a purchaser who went to. Photos and videos posted on her Facebook page show her with groups of smiling people in windy, winter. Thang told the purchasers they were more like her “good friends, siblings and families,” one video shows.

Federal and state records reveal Thang has not moved ownership of the drilling rights to the 4 buyers who informed Reuters they purchase leases from her. Thang’s company is still listed as the owner of those parcels in government records. Of the almost 300 rents Thang won at state and federal auctions, only 2 have been reassigned, both to the exact same new owner, according to a Reuters evaluation of state and federal lease computer registries.

In order to transfer ownership of a lease, both purchaser and seller must send a signed form to the state or federal land office. Reuters could not ascertain why Thang’s business continued to be noted as the owner of parcels that purchasers said they had actually bought from her and spent for.

In the greatest sale confirmed by Reuters, the owner of a sushi organization in Texas, Tha Cin, provided Thang $510,000 in numerous payments last year for 2 leases in New Mexico that Thang had bought that summer for about $200,000, according to Cin and her legal representative, copies of the sale arrangements, and lease records.

In spite of Cin’s purchase arrangements with Thang, dated in early September, federal and state leasing files still showed Thang’s business as the owner of the parcels since Friday. That shocked Cin’s attorney, Jeff Vaughan.

Cin stated she was moved by Thang’s spiritual recommendations in Facebook videos. “All our money was taken by the person who we believed and trusted, who spoke about God all the time,” she said.

Three other buyers informed Reuters that they have asked Thang to return their cash. One said she got her money back and another said he got just a portion back.

Thang and her attorney did not address Reuters’ questions about her oil-and-gas lease transactions. Thang on March 8 released a statement on her site stating: “Everybody who bought from me did so by their own will. I deserve to sell to who I want to, when I wish to, and for what cost I set.”

Thang’s lease-flipping shows vulnerabilities in the U.S. government’s oil-and-gas renting program, which generates public earnings from advancement on federal lands. The issue: Minimum bid requirements are $2 an acre, a level that has actually not been lifted in decades, making it easy for speculators with no intention to drill to protect acreage at deflated values in times of low demand, then resell at an earnings.

Thang purchased about a quarter of all the federal acreage offered in between August 2020 and January 2021, according to federal government data. (For graphics on Thang’s lease-buying, click tmsnrt.rs/ 2NDaHvg and tmsnrt.rs/ 3f1RyhT)

Critics of the low bid requirements say that raising them would hinder speculators and raise more revenue for public coffers.

” They are getting like a bargain-basement IPO on our natural deposits,” stated U.S. Agent Katie Porter, a Democrat from California, the new chair of your house Natural Resources Subcommittee on Oversight and Investigations. Porter has actually submitted a bill to raise minimum bids to $5 per acre.

The Trump administration looked for to take full advantage of domestic oil-and-gas production by using as much federal land as possible – more than 26 million acres over 4 years. But due to low need for leases, driven by low oil rates, just about a quarter of the acreage offered, driving lease rates to rock bottom.

The U.S. Department of the Interior, which handles the lease auctions, decreased to comment on the threats of speculation in the leasing program.

The oil-and-gas market turns down the argument that the leasing program’s low-minimum quotes lure speculators, and thinks raising minimum bids would discourage investment from oil firms. One trade group said the Biden administration should just withdraw Thang’s leases since she is not a U.S. person.

” It’s a simple fix to a rather bizarre case that says absolutely nothing about the broader leasing program,” said Kathleen Sgamma, president of the Western Energy Alliance.

Thang, a long-term U.S. citizen, utilized a U.S.-registered company to buy her leases, which is permitted under the federal leasing program.

President Joe Biden last month suspended brand-new leasing auctions pending a detailed review of the federal drilling program. The evaluation will weigh the ecological expenses of developing fossil fuels versus the public revenue it provides.

Spokespeople for Trump and for Biden’s White Home did not respond to ask for remark.

‘ I WILL PROSPER LIKE HER’

Thang immigrated to the United States 20 years earlier. She has actually given that ended up being a small celebrity in the Burmese immigrant neighborhood, describing herself on Facebook as a devout Christian, a successful businesswoman, and a philanthropist. Her fans consist of lots of refugees from Myanmar getting away military abuses versus ethnic minority groups. The United States has actually taken in about 175,000 Burmese refugees because 2007, U.S. government data shows.

Thang began grabbing cheap oil-and-gas leases last summer season and marketing them to the more than 600,000 fans of her Facebook page. In videos, Thang informed her fans that they could make enough cash with oil leases to abandon making sushi, a common occupation amongst Burmese immigrants.

Texas sushi entrepreneur Cin was amongst Thang’s very first buyers. In June, she got in touch with Thang, who persuaded Cin to invest $510,000 – her life cost savings – in New Mexico acreage, she said.

” She also informed me to quit my task, my sushi business, and come reside in New Mexico since I will be making in between at least 3,000 to 4,000 barrels per day,” said Cin.

She said Thang informed 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, directed by a relative of Thang’s, who could not address most of her concerns. “I seemed like something was wrong,” Cin stated.

She found out later on that Thang had actually acquired the acreage for simply $200,000

2 Burmese immigrants residing in Michigan – Andrew Sang and an associate who asked not to be called – told Reuters they had a comparable experience.

The pair paid Thang about $47,000 in July for two Wyoming parcels after seeing her Facebook posts, they stated. Thang had actually purchased the leases that exact same month for less than $12,000, according to Wyoming state records.

At the time, abysmal market conditions were causing recognized drillers to flee Wyoming. The state lease registry still listed Thang’s business as the owner of the leases as of Friday.

Throughout the Wyoming meetings with buyers, Thang stated that significant oil business had agreed to meet the group in 2021 to go over drilling their leases, said Sang, who participated in the tour. Thang, he said, made it appear like “everyone would become millionaires.”

Sang said that he agreed to buy a 2nd lease from Thang during the trip, this one on 80 acres of land in his home state of Michigan. He stated Thang explained it as “a present” since it would cost him just $5,000 Thang had purchased the lease at a September federal auction for $450 – the minimum rate of $2 an acre plus transaction charges, records show.

Sang said he got all but $100 of his $5,000 back for the Michigan lease after facing Thang. However Sang has actually not had the ability to get his refund for the Wyoming leases for reasons he said Thang has actually not made clear.

Reporting by Nichola Groom; editing by Richard Valdmanis and Brian Thevenot

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