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NEWS BULLETIN

February 18, 2004 --- Vol. 10, No. 18February 2004

State offering exploration incentive credits for 73 Cook Inlet tracts

The Alaska Division of Oil and Gas has set May 19 as the date for two areawide sales, North Slope Foothills and Cook Inlet, and is offering exploration incentive credits for 73 of the offshore Cook Inlet tracts.

Bid opening will begin at 8:30 a.m. in the Wilda Marston Theater at the Loussac Public Library in Anchorage.

There are 1,347 tracts in the North Slope Foothills sale, ranging in size from 1,280 to 5,760 acres, in an area between the Arctic National Wildlife Refuge and the National Petroleum Reserve-Alaska. The northern boundary of the sale area is the Umiat Meridian; the southern boundary is the Gates of the Arctic National Park and Preserve. There is a minimum cash bonus bid of $5 an acre; all leases have a royalty of 12.5 percent; and leases have a 10-year term.

There are 815 tracts in the Cook Inlet areawide, ranging from 640 acres to 5,760 acres, in the Matanuska and Susitna valleys, the Anchorage Bowl, the western and southern Kenai Peninsula from Point Possession to Anchor Point, on the western shore of Cook Inlet from the Beluga River to Harriet Point, as well as within Cook Inlet. There is a minimum cash bonus bid of $5 an acre; all leases have a royalty of 12.5 percent; leases will have a term of seven years.

Seventy-three offshore Cook Inlet tracts have been assigned an exploration incentive credit of $200 per foot drilled for the first exploratory well per tract, not to exceed 20 percent of the total exploratory well costs. The division said credit may be earned for one well per lease during the first three years of the primary term, inclusive of other allowed exploration and development credit program.

For a list of tracts with an exploration incentive credit see the sale announcement on the divisionís website: www.dog.dnr.state.ak.us/oil.

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