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April 2011

Vol. 16, No. 15 Week of April 10, 2011

New sale date, leases with special terms

The Alaska Division of Oil and Gas has rescheduled its Cook Inlet areawide lease sale to June 22.

Division Director Kevin Banks said March 7 that the sale date was postponed from the usual time in late May to give bidders more time to evaluate prospects in tracts to be offered, in particular the “Starichkof Hansen tracts” that were formerly part of the Cosmopolitan unit. These three tracts neighbor two tracts Pioneer Natural Resources Alaska still holds and will have different terms because of “their high value and known potential for oil and gas. It’s our intent to encourage quick development of these tracts,” Banks said.

All tracts in the sale will bear a 12.5 percent royalty rate.

The term of remote offshore leases is 10 years; most of the rest of the leases have a seven-year term.

The three Starichkof Hansen tracts, however, will have just a five-year term.

Those three leases will also be offered as a bundle and bidders must submit equivalent bonus bids per acre on all three tracts; the tracts will be awarded to the qualified bidder submitting the highest bonus bid per acre for all three tracts, “all or none.”

The minimum bid for most tracts in the sale is $10 per acre; for the Starichkof Hansen tracts the minimum bid is $50 an acre, and rentals begin on those tracts at $50 per acre per year, rising to $500 per acre.

Banks said those three leases will require a work commitment and submission of a plan of exploration for approval within six months of lease issue.

Bids must be received by 4 p.m. June 20.

Bids will be opened at 9 a.m. on June 22 at the Dena’ina Civic and Convention Center in Anchorage.

—Petroleum News






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