October 24, 2001 --- Vol. 7, No. 134October 2001

North Slope, Beaufort Sea areawide lease sales bring in $12.9 million

The state's second Beaufort Sea and fourth North Slope areawide sales drew combined high bonus bids of $12,886,355.40 and 52 percent of that amount came from two new bidders: Armstrong Resources LLC of Denver ($4.2 million) and Shell Western Exploration and Production Inc. ($2.4 million).

The bulk of the bids the state received were for North Slope tracts, 146 bids for 110 tracts, for a sale total of $7,445,081.60. The state received $51.8 million at the first North Slope areawide sale in 1998; $2.6 million in 1999 and an estimated $10.7 million in 2000.

There were 31 bids for 24 tracts in the Beaufort Sea sale, for a total of $5,441,273.80 in apparent high bonus bids. The state received only $338,922 at the first Beaufort Sea areawide sale.

The state adjudicates bids after the sale and then does title work, so exact acreage and total in high bonus bids (based upon a dollar amount per acre) is not known until post-sale work is completed.

Armstrong's bids in the Beaufort Sea sale were for a block of 12 tracts it was apparent high bidder on 10 of the tracts in Harrison Bay west of Oliktok Point. The company bid $316.39 an acre for tract 378, a total bonus bid of $809,959, the high per-acre bid for both sales.

Shell Western bid on 13 tracts and was apparent high bidder on 10. The tracts are at the southern edge of the sale area south of the Colville River area and Kuparuk. Tract 109, on which Shell bid $297 an acre for a total bonus bid of $1,710,720, the high per-acre bid for the North Slope sale and the highest total bonus bid in either sale, is at the southern end of a group of tracts held by Phillips Alaska Inc. and Chevron between the Itkillik and Kuparuk rivers.

State to put North Slope royalty gas out to bid

Alaska Department of Natural Resources Commissioner Pat Pourchot said Oct. 24 that the state is going to start the process to put its North Slope royalty gas out for bid.

Pourchot was making comments at the state's areawide North Slope and Beaufort Sea oil and gas lease sales. He said that since there were so many people present with an interest in the state's oil and gas resources, "I wanted to take this opportunity to make an announcement of something else that we are about ready to pursue. And that's a possible sale of natural gas, the state's natural gas royalty gas."

Pourchot said that all of the interest in development of a gas pipeline from the North Slope "has led to a number of companies inquiring of the state about the availability of the state's royalty gas" should a gas pipeline be developed and the gas be available for commercial use.

There is a process laid down by the Legislature that the state must follow, and within the next couple of days, he said, the state will be announcing the start of that process and a timeline for pursuing royalty gas sales.

It is, he said, a public process and involves preliminary and best interest findings, presentations to the royalty board and then approval by the state Legislature.

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