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Shell, ConocoPhillips buy EnCana’s Alaska Beaufort Sea OCS leases
Five years after it entered Alaska as Alberta Energy, Calgary independent EnCana has officially left the state.
There is still the matter of getting lease assignments approved by the feds, but the Calgary-based independent has sold 19 out of its 24 Beaufort Sea outer continental shelf leases to Shell and five to ConocoPhillips.
“We have no more leases in Alaska,” EnCana spokesman Alan Boras told Petroleum News Oct. 19.
The company announced it was putting its Alaska assets up for sale in December 2004 as part of a move away from conventional oil and gas properties and offshore ventures, Boras said. Instead, EnCana is focusing on what its top executive Gwyn Morgan says it does best — developing “resource” plays in North America; specifically unconventional oil and gas plays such as oil sands in Alberta and coalbed methane in the Rockies.
Just prior to announcing it was pulling up stakes in Alaska, EnCana dropped its leases in the National Petroleum Reserve-Alaska. And in mid-2005 the company sold its one-third interest in a Brooks Range Foothills joint venture involving approximately 1.5 million acres to partners Anadarko Petroleum and Petro-Canada. Shell leases in wildcat region The EnCana tracts purchased by Shell and ConocoPhillips were initially won in U.S. Minerals Management Service lease sale 186, held in September 2003.
The five leases being assigned to ConocoPhillips are approximately 12 miles northeast of BP’s Liberty prospect.
The 19 offshore leases being transferred to Shell are in a wildcat region of the western Beaufort, north of NPR-A in the Smith Bay area. They adjoin ConocoPhillips leases that were acquired in 1996 at MMS sale 144, and lie approximately 12-18 miles northeast of the Simpson wells in NPR-A.
According to MMS Alaska Director John Goll there are no wells in the immediate area. The leases are in a hole between exploration wells, he said following the 2003 lease sale.
Shell spokeswoman Stacy Hutchinson told Petroleum News that the EnCana leases “add diversity to our Beaufort leasehold … and are consistent with our long-term strategy in Alaska of pursuing high impact exploration opportunities in areas with robust petroleum systems.”
Lease assignments conveying “100 percent record title interest” from EnCana to Shell were filed in September with the U.S. Minerals Management Service; the assignments to ConocoPhillips were filed Oct. 18, MMS said.
MMS spokeswoman Robin Cacy said the assignments “still need to go through a bond adequacy review and a Department of Justice anti-trust review.” Seismic shoot planned Shell, which formerly operated in Cook Inlet, returned to Alaska after an absence of seven years, taking 84 leases in the March MMS Beaufort Sea lease sale 195 for $44 million. The company opened an office in Anchorage a few months later, taking over EnCana’s space and hiring two of EnCana’s employees, including geologist Tom Homza.
Shell executives have said they intend to build a significant land position in Alaska.
The leases Shell was high bidder on in the March lease sale stretch from the western Beaufort north of NPR-A east to the edge of the Arctic National Wildlife Refuge. (See related story on page 4 of this issue about Kuvlum.)
Shell is reportedly planning a seismic shoot next summer on its Beaufort leases.
—Kay Cashman
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