Alaska received nearly $4.5 million in high bids for oil and gas leases in Cook Inlet and received a bid for a geothermal lease on Augustine Island during a series of lease sales on Wednesday.
The Cook Inlet lease sale was the third largest of its kind in nominal dollars and the sixth largest in acreage leased since the state’s area-wide lease sale program began in 1999, officials said.
“We’re very pleased to see the Cook Inlet energy renaissance continue to take hold,” said Alaska Department of Natural Resources (DNR) Commissioner Dan Sullivan. “This provides increased energy security for Alaskans and growing employment opportunities in Southcentral.
“Three years ago, the conventional wisdom was that Cook Inlet was a dead hydrocarbon basin. We’ve been able to turn that around with strong legislative action to make Cook Inlet one of the most competitive places in the country to invest; a comprehensive strategy at DNR to secure timely development and attract new investors; and a strong partnership between all the stakeholders in Cook Inlet to address the key issues of gas storage, deliverability and increased energy supplies for Alaskans.”
In the past two years, Cook Inlet has seen an increase in oil and gas investment from a variety of large and small companies, according to DNR. The past three Cook Inlet lease sales have been some of the best in years, and the investment activity is beginning to translate into increased exploration, drilling and natural gas production in the Inlet. For example, Southcentral utilities, which have faced chronic periods of gas shortages, were recently informed that their gas supply needs could be met through the end of 2017.
In the Cook Inlet sale, 32 bids were received from seven bidding groups on 28 tracts, encompassing 145,739 acres. Bidders included Hilcorp Alaska, Cook Inlet Energy, and NordAq Energy. Hilcorp was the most active bidder, winning 19 of the 28 tracts in the lease sale.
“In the past two years, we’ve seen record lease sales for the Inlet and new players moving in,” said DNR Division of Oil and Gas Director Bill Barron. “But obtaining a lease is just the first step. We are very pleased that a number of leaseholders in the Inlet are busy this year exploring and securing their land positions, evaluating their exploration results, and working over properties they’ve obtained from other companies.”
In the Augustine Island geothermal lease sale, the state’s first for the island, a single bid was received for one of the 26 tracts offered. The bidder was Nicholas van Wyck. The Alaska Peninsula area-wide oil and gas lease sale did not draw any bids, as has been the case for the last five years.
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