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State takes in $807,891 at Beaufort sale Three bidders, including new entrant GMT Exploration, take 48,000 acres, 18 offshore tracts; highest bid adjacent to Oooguruk Kristen Nelson Petroleum News
The State of Alaska took in $807,891.20 in bids on 18 tracts in a Beaufort Sea areawide oil and gas lease sale held Feb. 24 in Anchorage.
The sale attracted three bidders or bidding groups and total acreage for the 18 tracts, each of which received one bid, was 48,000.
Denver-based GMT Exploration Co., a newcomer to Alaska lease sales, took 10 tracts at the sale, with bids totaling $540,806.40, 66.9 percent of the total for the lease sale.
GMT also had the highest per-acre bid in the sale, $81.59 for tract 411, which lies adjacent to Oooguruk on the west. The tract was formerly held by Anadarko Petroleum Corp.; the Anadarko lease expired in August.
GMT’s second-highest bid was for tract 407, on the northern edge of Oooguruk. The company bid $43.07 an acre — also the second highest per-acre bid in the sale — a total of $82,694.40, for the tract formerly held by Oooguruk operator Pioneer Natural Resources Alaska; that lease expired at the end of July.
Deputy Director of Oil and Gas Kurt Gibson told Petroleum News after the sale that tract 411, “the high bid, abuts Oooguruk. Pioneer’s having tremendous success out there right now” and others would probably “like to see if there’s an opportunity similar to the opportunity that Pioneer’s found out there.”
Pioneer Natural Resources Alaska is the operator at Oooguruk, which produces from State of Alaska Beaufort Sea acreage. Eni is developing the adjacent Nikaitchuq unit, which will also produce from state Beaufort Sea acreage.
Gibson said that as far as he knew GMT had no involvement in Alaska before this lease sale: “They may just be somebody who’s looking for a new opportunity.”
In addition to its two high bids, GMT bid $12.17 an acre for a block of eight tracts north of the National Petroleum Reserve-Alaska and north of ConocoPhillips Alaska-Anadarko state acreage west of the Colville River unit.
Former Conoco tracts A bidding group of Samuel Cade (75 percent) and Dan Donkel (25 percent) bid $12.34 per acre for seven tracts, for a total of $205,337.60, 25.4 percent of the total bid at the sale.
This block of tracts, formerly held by ConocoPhillips Alaska, lie in the vicinity of and north of Cross Island and north of the Duck Island unit (Endicott).
The men are partners in a considerable amount of Alaska oil and gas lease acreage, with Cade’s position totaling 210,983 acres and Donkel’s totaling 56,586 acres.
A bidding group of Sun-West Oil & Gas (75 percent) and Michael Shearn (25 percent) bid $12.06 an acre, a total of $61,747.20, for a tract offshore the Arctic National Wildlife Refuge on the eastern side of the sale. Sun-West, an oil and gas investment company managed by the Spear family of Midland, Texas, first bid in a Beaufort Sea sale in 2000, and holds leases in state waters off of ANWR, two east of Kaktovik and now, with the tract in the current sale, two west of Kaktovik. Shearn is a partner in all of the tracts.
Bids down “The total number of bids is down this year,” Gibson said after the sale.
One reason could be “that the North Slope is a fairly mature basin; it’s pretty well subscribed by a lot of the incumbents.”
And with the price of oil down and the global economic downturn, there may be “fewer investors out there looking for opportunities right now; instead they’re kind of hunkering down and holding their own,” Gibson said.
The state has seen a lot more bidders in the past, he said.
At the most recent Beaufort Sea lease sale, in 2008, 32 tracts were leased and the state received $2.61 million in bonus bids. There were 21 tracts leased in 2007 for just under $705,000; in 2006 there were 13 tracts leased for just under $522,000.
An earlier 2006 sale, actually 2005 deferred, was another big year for the Beaufort, with 62 tracts leased and $7.67 million in bonus bids.
This sale was actually the October 2009 sale postponed, Gibson said as he prepared to read the bids.
Division Director Kevin Banks said at last fall’s North Slope areawide lease sale that the division missed one of its obligatory public notices as it was preparing a new 10-year best interest finding for the Beaufort Sea areawide sale, causing the sale date to slip.
Gibson said the Beaufort Sea sale will return to its normal fall timeframe this year, along with the North Slope and North Slope Foothills areawide sales. The next sales, for Cook Inlet and the Alaska Peninsula, are scheduled for this May.
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