NEWS BULLETIN

May 01, 2002 --- Vol. 8, No. 49May 2002

Foothills lease sale most acreage ever for state sale; Petro-Canada dominates

The state of Alaska opened bids for two areawide lease sales in Anchorage today.

The Cook Inlet sale, which garnered $581,290.02, appeared to be a matter of companies (Marathon Oil Co., Northstar Energy Group and Forest Oil Corp.) filling in around prospects, combined with bidding from individuals and groups of individuals (Monte J. Allen; Daniel K. Donkel, Robert Bolt and Monte J. Allen; Richard E. Wagner; Daniel K. Donkel and Robert Bolt; and Paul L. Craig).

The North Slope Foothills sale, however, brought in $10,266,086.40 in apparent high bonus bids, and at 1,119,360 acres (201 bids on 197 tracts) was, Division of Oil and Gas Director Mark Myers said, the most acreage ever leased in a state sale.

Last year the first foothills' areawide also set an acreage record — 978,560 acres — and drew 184 bids for 170 tracts.

Acreage breakouts weren't immediately available, but based on tracts taken and dollars bid, Petro-Canada Alaska Inc. dominated the sale, with apparent high bonus bids of $8.5 million (83 percent of the sale dollars) on 179 tracts.

Petro-Canada was also a major bidder at last year's sale, taking 56 tracts, and Myers said after the sale today that, while leases for last year's sale haven't been issued yet, the combination of the two sales would appear to put Petro-Canada over the 500,000 acre limit for leases. It isn't a problem until the leases are issued, he said. The company can either find partners for some of the acreage or relinquish some of it.

A bidding group of 50 percent Anadarko Petroleum Corp. and 50 percent EnCana was apparent high bidder on 13 tracts for $1.58 million. Bidding by itself, Anadarko took four tracts for just over $128,000, and Unocal took a single tract for just under $36,000.

The Anadarko-EnCana bidding group had the highest bids per acre: $74.34 an acre for tract 200 and $73.89 an acre for tract 195.

Mackenzie pipeline “viable” despite U.S. moves to subsidize Alaska route

Petro-Canada chief executive officer Ron Brenneman says a standalone Mackenzie Valley gas pipeline is viable, with or without Alaska gas, and despite what he views as U.S. Senate moves to subsidize an Alaska Highway route.

He predicted gas will start moving out of the Mackenzie Delta in the next 10 years.

Speaking after the Petro-Canada annual meeting on April 30, Brenneman said he is “very disappointed” that Senate legislation is proposing loan guarantees and tax credits for the highway project.

Natural Resources Minister Herb Dhaliwal also joined the chorus of opposition from Canada to the Senate bill. He hopes the legislation will be changed in conference with a parallel bill from the House of Representatives before it goes to President George W. Bush.


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