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The Explorers 2008: O&G sales bring in $9.1 million Armstrong subsidiary 70 & 148 LLC mystery bidder in state areawide sales, with 75% of high bids Kristen Nelson Petroleum News
The State of Alaska brought in more than $9.1 million in apparent high bids at two oil and gas lease sales Oct. 22, more than $2.6 million at the Beaufort Sea areawide sale and more than $6.5 million at the North Slope areawide sale.
These could have been relatively small sales since many of the tracts in these areas are already under lease, but a large number of bids by “70 & 148 LLC” of Denver — a total of almost $6.9 million — kicked up the total acreage receiving bids, as well as the state’s high bonus bid take, accounting for 75 percent of the dollar value of high bids.
Who was this mystery bidder? Petroleum News learned after the sale from Bill Armstrong of Armstrong Oil and Gas of Denver that 70 & 148 LLC is “another Armstrong affiliate” (see Armstrong story in Explorers).
The state received 72 bids from seven bidders or bidding groups for 60 tracts in the North Slope sale, and 38 bids from nine bidders or bidding groups for 32 tracts in the Beaufort Sea sale.
“Many tracts offered in yesterday’s sales were relinquished to the state in the ordinary course of our management of our oil and gas lands,” Kevin Banks, director of the Division of Oil and Gas, said in an Oct. 23 statement.
“I believe that new entrants in the Alaska oil and gas industry are motivated to try new concepts to develop prospects that may have been overlooked to date. The economy of Alaska is enhanced when these newcomers can join those active companies already here as part of a vibrant, diversified industry,” he said.
Interest in Kuparuk area The 70 & 148 LLC bids accounted for 77 percent of the dollar value of apparent high bids in the North Slope and 71 percent of the apparent high bids at the Beaufort Sea sale — $5 million of $6.5 million in North Slope bids and $1.86 million of the $2.6 million Beaufort Sea high bids. The company placed 20 of the 38 bids in the Beaufort Sea sale, and was apparent high bidder on 19 of the 32 tracts receiving bids. In the North Slope sale, 70 & 148 placed 51 of the 72 bids the state received, and was apparent high bidder on 49 of the 60 tracts receiving bids.
Armstrong told Petroleum News that 70 &148 picked up acreage, “In and around where we picked up leases when we first came to Alaska in 2001, northeast and northwest of Kuparuk and south of Kuparuk, generally in the Kuparuk area — actually in every direction from Kuparuk except east of the unit.”
When asked how many prospects his company had identified in the acreage it picked up at the lease sale, Armstrong said there were “a lot of prospects that we identified in the old days, as well as some new ones.”
Beaufort Sea bids The 70 & 148 high bids in the Beaufort Sea sale included $146.17 an acre, the highest per-acre bid in the sale, for tract 414 on the western edge of the Pioneer Natural Resources Alaska-operated Oooguruk unit. The 70 & 148 bids included five tracts north of Oooguruk and 10 tracts west of Oooguruk.
The company also had high bids on four tracts west of Oooguruk and north of the Colville River unit.
Samuel H. Cade (75 percent) and Daniel K. Donkel (25 percent) had apparent high bids of $280,992 on five tracts, among the six most easterly receiving bids in the sale.
The major Prudhoe Bay owners (BP Exploration (Alaska), ConocoPhillips Alaska, ExxonMobil Production Co. and Chevron) bid $150,048 for a tract on the northern edge of the Prudhoe Bay unit in Niakuk area. ConocoPhillips Alaska bid $106,316.80 for a tract on the edge of the Colville River unit.
AVCG LLC had high bids totaling $83,200 on two adjacent tracts east of Badami. J. Andrew Bachner had the high bid on two tracts for a total of $52,582.40, both contiguous to Badami.
A bidding group of Sun-West Oil & Gas, Michael Shearn and Shane Spear took a single tract for $52,281.16 — the farthest east tract receiving a bid.
Savant Alaska took a single tract for $27,673.60, a tract at the eastern end of a Savant block west of Badami and south and southwest of Liberty.
North Slope The 49 tracts that 70 &148 took in the North Slope areawide sale begin in the north and form a block with the tracts west of Oooguruk that the company took in the Beaufort Sea sale, extending south along the western edge of the Kuparuk River unit
Where the North Slope and Beaufort Sea sales meet, 70 & 148 took 12 tracts between the Oooguruk and Colville River units. Farther south, between the Kuparuk River and the Colville River units, the company took nine tracts. The company took five tracts on the southern borders of Kuparuk and 10 tracts south of Kuparuk.
To the south and east of Meltwater, a southern extension of the Kuparuk River unit, 70 & 148 took nine tracts. South of the North Slope royalty line, in the southwestern portion of the sale area, the company took four tracts.
Pioneer Natural Resources Alaska had the second-highest North Slope bid total, $783,027.20 — the company’s bid for a single tract, 1211, adjacent to the Pioneer-operated Oooguruk unit. That bid had the highest per-acre bid in the sale, $305.87 as well as the highest tract bid. Tract 1211 also drew a $161.17 per acre bid from 70 & 148.
FEX LP bid $590,400 for six tracts in the southwestern portion of the sale, three adjacent to a four-tract FEX block between the Itkillik and Kuparuk rivers at the southern boundary of the lease sale area, a block which contains the 1960s Itkillik Unit well, and the other three tracts farther east, adjacent to a seven-block FEX prospect west of the trans-Alaska oil pipeline, a block which contains the 1960s Richfield Susie well.
J. Andrew Bachner took two tracts immediately south of Badami on the eastern side of the sale area for $52,582.40.
AVCG took a single tract for $45,440 immediately west of the Colville River unit and Savant Alaska LLC took a single tract for $27,673.60 immediately south of Badami.
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