NEWS BULLETIN

October 26, 2005 --- Vol. 11, No. 89October 2005

Alaska Peninsula areawide sale draws two bidders, $1.3 million

The State of Alaska’s first Alaska Peninsula areawide oil and gas lease sale —the first state sale in the area since the 1980s — drew two bidders Oct. 26, Shell Offshore Inc. and Hewitt Minerals Corp. out of Ardmore, Okla.

The state offered 1,047 tracts and received 37 bids on 37 tracts in the Point Moller, Nelson Lagoon area.

Marcus Patterson, Shell Exploration & Production team leader for Alaska exploration, said after the sale that Shell looked at things “from a regional perspective” and focused on “the standard views that we have of the basin model.”

Patterson said the 33 tracts on which Shell bid were both onshore and offshore, about 190,000 acres.

Once the tracts are awarded, he said, “we’ll start an evaluation program” on the acreage. Shell has had several meetings on its plans in the area, “and will continue to engage the local stakeholders,” he said.

Shell returned to Alaska in a big way earlier this year, bidding more than $44 million on federal outer continental shelf acreage in the Beaufort Sea.

Shell bid $954,063 at the Alaska Peninsula sale, a consistent $5.02 an acre.

Hewitt Mineral, the other bidder, bid a total of $313,922 for four tracts, with $21.14 an acre on two tracts (the high per acre and total high bid of the sale, $121,767) and $6.11 per acre on two other tracts.

Mark Myers, director of the Alaska Division of Oil and Gas, said after the sale that he understood Hewitt Mineral became interested in the Alaska Peninsula sale after seeing technical data the division had at a convention in the Lower 48.

Myers noted that this is the first sale in the area in 22 years, “and we’re a long ways from any infrastructure, so I think it’s a good solid start in the evaluation.

“When you look at the history of the North Slope, you might see a similar pattern — pre-Prudhoe vs. post-Prudhoe,” he said.

Editor’s note: The full story will be in the Oct. 30 issue of Petroleum News


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