BLM NPR-A sale brings in $1.5 million; 3 bidders take 16 tracts
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Kristen Nelson Petroleum News
The federal Bureau of Land Management received 16 bids on 174,044 acres from three bidders at its Dec. 12 National Petroleum Reserve-Alaska lease sale, taking in $1,533,705 in apparent high bids. Three current leaseholders, ConocoPhillips Alaska Inc., Emerald House LLC (Elixir Petroleum) and Nordaq Energy Inc., submitted bids.
Emerald House took 10 tracts; ConocoPhillips Alaska took five; Nordaq Energy took a single tract.
There were no competing bids.
Fifty percent of the bid receipts, $766,852, goes to the state of Alaska.
Encouraging results Interior’s Assistant Secretary for Land and Minerals Joe Balash, a former Alaska state official, said after the sale that the results were encouraging - an improvement over the 2017 sale when BLM received only seven bids. He noted that Interior believes the petroleum reserve has much more potential and has much more to offer the American people, hence the need to take a look at the integrated plan. A significant portion of NPR-A is not available for leasing under the current plan, Balash said, including the Teshekpuk Lake area and farther north. He said it’s not much of a secret that under the current plan much of the area in which industry is interested near the Barrow Arch is not available for leasing.
Balash said they have heard from operators and lessees that the current plan presents challenges in terms of infrastructure access, particularly for state waters in Smith Bay. He also said many of the geologic features supporting that particular hydrocarbon system are thought to extend farther toward shore.
Interior said in November that it intended to prepare a new integrated activity plan and associated environmental impact statement for NPR-A.
Southeastern interest BLM Alaska Acting State Director Ted Murphy said after the sale that all of the interest was in the very southeastern portion of the reserve, with ConocoPhillips taking leases south of its existing holdings and Emerald House moving to the south.
Current leasing in NPR-A began in 1999, with a $104.6 million sale, followed by a $63.8 million sale in 2002 and a $53.9 million sale in 2004. Annual sales began in 2010, with the most interest at the 2016 sale, which brought in $18.8 million.
Prior to the sale there were 199 active leases in NPR-A, 162 of which are held by ConocoPhillips Alaska, which is the only company operating there - production from Greater Mooses Tooth 1 began in October. Nordaq holds 18 leases and interests in two others. Emerald House LLC, an Australian-based company, has three existing leases which it acquired from Paul Craig.
Building out Emerald House, with 10 bids on 114,167 acres for $1,120.424, averaged $9.81 per acre. The Emerald House bids were the most southerly in the sale, running south toward the southeastern boundary of NPR-A and appear to be north and northwest of the company’s existing NPR-A leases. Prior to this sale the company had 35,423 acres.
ConocoPhillips bid $355,823 for 48,492 acres in five tracts, an average of $7.34 per acre. Those five tracts are contiguous and run south from existing Conoco acreage along the eastern boundary of NPR-A. Prior to this sale the company had 1,033,275 acres in NPR-A.
The single Nordaq tract, for which the company bid $57,494 on 11,385 acres, averaged $5.05 an acre. Prior to this sale Nordaq had 206,039 acres and an interest in an additional 22,771 acres.
Total leased acreage in NPR-A was 1,384,352 acres prior to this sale.
Other current leaseholders include Renaissance Umiat with two leases, 17,633 acres.
A partnership of Armstrong Energy, Repsol E&P, GMT Exploration Co. and Oil Search (Alaska) holds 11 leases, 62,044 acres; and a partnership of Armstrong, Repsol and Oil Search holds one lease, 7,167 acres.
- KRISTEN NELSON
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