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Providing coverage of Alaska and northern Canada's oil and gas industry
May 2018

Vol. 23, No.19 Week of May 13, 2018

Hilcorp only bidder on 8 tracts in state areawide Cook Inlet sale

Kristen Nelson

Petroleum News

Hilcorp Alaska was the only bidder in the state’s May 9 areawide Cook Inlet oil and gas lease sale, bidding on eight tracts, some 16,636 acres, for an apparent high bid total of $298,799.76, the Alaska Division of Oil and Gas said after the public bid opening.

The division received no bids in the Alaska Peninsula areawide sale.

Hilcorp was also the only bidder in last year’s Cook Inlet areawide sale, bidding on six tracts in that sale for a total of $836,502.

Division Director Chantal Walsh said after the sale that Hilcorp’s bids indicated the company was still exploring and looking for both oil and gas. The company is the inlet’s largest producer and operates the majority of Cook Inlet units.

Hilcorp appeared to be picking up tracts adjacent to or in the vicinity of units which it operates.

Two of the tracts receiving bids are in Cook Inlet, east of the Trading Bay unit. Walsh said those tracts were an extension of the Middle Ground Shoal anticlinal trend and an offset to Trading Bay.

One of those tracts, 292, received the highest bid in the sale, $25 per acre, for a total of $64,000. The average high bid per acre in the sale was $17.96. Tract 292 is adjacent on the east to the Trading Bay unit, which Hilcorp operates. The other offshore Cook Inlet tract on which Hilcorp bid, 288, is southeast of tract 292, between Trading Bay and the Kitchen Lights unit, operated by Furie.

Onshore, Hilcorp bid on six tracts on the lower Kenai Peninsula, two west and one east of Deep Creek, one between the Nikolaevsk and North Fork units, and two east of and adjacent to the Cosmopolitan unit. Hilcorp is the operator at Deep Creek and Nikolaevsk; Glacier Oil & Gas is the North Fork operator; BlueCrest is the Cosmopolitan operator.

Walsh noted after the sale that 3-D seismic of Cosmopolitan was recently made available after the 10-year confidentiality period expired.

Some 2.6 million acres were available in the sale, the division said, with some 500,000 acres currently under lease in Cook Inlet.

Interest in Cook Inlet areawide sales has varied widely in the last 10 years, with no bids in 2016, a low of $80,678 for 5,733 acres in 2009 and a high of $8.2 million for 449,164 acres in 2011.

Alaska Peninsula areawide sales began in 2005. That sale drew more than $1.1 million in high bids on 190,494 acres. Interest since then been sparse, with only one sale since, in 2014, drawing bids, and those totaling only $47,807 on 9,561 acres, three tracts.

- KRISTEN NELSON






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