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Bidding Robust in Latest Alaska Lease Sales

The total of high bids in the latest northern Alaska oil and gas lease sales -- $59.7 million -- is the third-highest amount received in state history, according to officials. Competition for tracts was high, they said following the sales on Wednesday.

Seven lease tracts received a bid of $1 million or more, and a total of 56 tracts attracted competition from multiple companies. The two highest winning bids, both for $2,538 per acre and submitted by bidder 70 & 148 LLC, netted a combined $13 million for the state.

The state's Division of Oil and Gas received a total of 356 bids from 12 different bidding groups on 298 tracts encompassing about 641,696acres.

"This is one of the most competitive lease sales we've seen in many years, and it shows what can happen when we have a competitive investment climate. A key factor was the reforms to our production tax regime that were upheld by Alaska voters in August [see Daily GPI,Aug. 21]," said Department of Natural Resources Commissioner Joe Balash.

The North Slope Areawide lease sale netted 297 bids from nine bidding groups on 254 tracts encompassing 524,387acres. Winning bonus bids totaled $54.6 million, making it the largest North Slope lease sale since areawide leasing began in 1998.

The Beaufort Sea Areawide sale received 57 bids from five bidding groups on 42 tracts encompassing 107,189 acres. Winning bids totaled nearly $5 million, making it the third-largest Beaufort sale by dollar amount since areawide leasing began in 2000.

The North Slope Foothills Areawide sale received two bids from one bidding group on two tracts encompassing 10,120 acres. The sale, which did not receive any bids last year, netted $147,014.

Two companies -- Caelus Alaska Exploration Co. and Hilcorp Alaska LLC -- participated in the Northern Alaska lease sales for the first time this year. Both companies have recently acquired producing assets on the North Slope.

"Today's excellent results show that industry realizes the vast energy potential still held on the North Slope," said Bill Barron, Oil and Gas Division director. "The investment will further the state's goal of developing its hydrocarbon resources to keep the Trans-Alaska Pipeline System filled and functioning."

Results are preliminary and subject to bidder qualification.

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