NEWS BULLETIN

August 12, 2004 --- Vol. 10, No. 70August 2004

Burlington Resources drops Foothills leases

Burlington Resources has dropped leases it took in Alaska’s first areawide Foothills lease sale in May of 2001. State record show that all 32 leases, Burlington’s only leases in the state, were terminated in July.

The company, bidding as “5051 Alaska Inc.,” a legal entity set up by Houston-based Burlington to bid in the 2001 sale, bid on and took 32 leases for $1,992,163.60, 18.6 percent of the dollars bid at the $10,720,940.80 sale. The state sold 978,560 acres at the Foothills sale, at that time the most acreage ever sold in a single sale. The record was topped at the 2002 Foothills sale, when more than a million acres were sold.

The leases Burlington took at the sale were in a block in the southern half of the sale area, between the Anaktuvuk and Itkillik rivers.

Ellen DeSanctis, Burlington’s vice president of corporate communications, told Petroleum News after the 2001 sale that its bids were a low-risk way to enter an emerging gas opportunity.

“We are trying to get a toehold in some opportunities in the far northwest of North America that would be in concert with our efforts in the Mackenzie Delta to build a position in what could be future opportunities in North American, particularly gas,” DeSanctis said in May 2001.

Pat Galvin, Alaska Division of Oil and Gas petroleum land manager, told Petroleum News Aug. 12 that rent was due on the leases July 1.

“When we didn’t receive it, we put in a courtesy call. They said they weren’t going to pay it.”

The division didn’t receive any other explanation, he said, nor did it receive anything in writing. Galvin said the leases had a 10-year term.


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