Ten groups pay $9 million for on/offshore lease sale on North Slope

The state of Alaska auctioned off new leases on the North Slope Oct. 22, bringing bonus bids of $9.1 million into the state treasury. Some 32 offshore tracts and 60 onshore tracts brought bids from 10 different bidding groups in the sale.

The state offers acreage annually in regularly schedule areawide sales, which typically include all unleased state lands in a given region. The October sale included unleased North Slope onshore and Beaufort Sea offshore acreage within the state’s three-mile territorial limit.

Other areawide sales are held at different times of the year in the Cook Inlet basin in southern Alaska and the Bristol Bay region in Southwest Alaska.

Kevin Banks, director of the state Division of Oil and Gas, said the Oct. 22 North Slope sale results signaled a continued interest in oil and gas exploration. Tracts that received bids were generally around existing prospects and areas of unleased acreage between and around existing producing units, Banks said.

Many bids were for tracts around the Colville River delta and offshore. The tract receiving the highest bid, $305.87 per acre by Pioneer Natural Resources, is adjacent to the Oooguruk Unit, which contains the Kuparuk and Jurassic oil-producing sandstone reservoirs.

Leases recently taken out of the Badami Unit, east of Prudhoe Bay, also received bids. One tract near the Niakuk unit, which produces from the Kuparuk formation, was bid on by a consortium of major producers: BP, ConocoPhillips, Exxon and Chevron.

The majority of bids were by a new entrant, “70 & 148 LLC” (the latitude and longitude coordinates for Prudhoe Bay), which successfully bid on 19 Beaufort Sea tracts and 48 North Slope tracts.

“Many tracts offered in the sale were relinquished to the state in the ordinary course of our management of oil and gas lands,” Banks said, meaning they had been previously leased and returned to the state.

The fact that different companies bid on the previously leased acreage is encouraging, Banks said.

“I believe that new entrants in the Alaska oil and gas industry are motivated to try new concepts to develop prospects that may have been overlooked,” he said. “The economy of Alaska is enhanced when these newcomers can join those active companies already here as part of a vibrant, diversified petroleum industry.”

Half of the bonus bids received Oct. 22, approximately $4.55 million, will be deposited in the permanent fund account.

11/09/2016 - 12:19pm