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Spring bid opening May 7 at Dena’ina
Kristen Nelson Petroleum News
Bid opening for the state’s 2014 Cook Inlet and Alaska Peninsula areawide oil and gas lease sales will be May 7 at 9 a.m. at the Dena’ina Civic and Convention Center in Anchorage.
In a March 7 notice of sale the Alaska Department of Natural Resources Division of Oil and Gas said bid submission would be from 9 a.m. to 4 p.m. May 5 in Suite 800 of the Atwood Building in Anchorage, or by mail.
Alaska Peninsula tracts will be offered at a minimum bid of $5 per acre with a 12.5 percent royalty rate and a primary lease term of 10 years. Per-acre rental rates are $1 for the first year, $1.50 for the second year, $2 for the third year, $2.50 for the fourth year and $3 beginning with the fifth year. There are 1,047 tracts available in the Alaska Peninsula sale, ranging from 1,280 to 5,760 acres, on state uplands and tide and submerged lands on the north side of the Alaska Peninsula from the Nushagak Peninsula to just north of Cold Bay.
There have been no bids received for Alaska Peninsula tracts since 2007 and there are no active leases in this area.
Cook Inlet areawide Cook Inlet leases will be offered at a minimum bid of $25 per acre with a 12.5 percent royalty rate and a primary lease term of 10 years. Rental rates are $10 per acre for years one through seven and $250 per acre for years eight and beyond. The sales notice says that “beginning in the year after the year in which sustained production commences on the lease or the state otherwise determines in its sole discretion, upon request, that the lessee has exercised reasonable diligence in exploring and developing the lease,” the annual rent will be $10 per acre or fraction of an acre. “In evaluating a request to decrease rental based on the exercise of reasonable diligence, the state will consider the funds expended by the lessee to explore and develop the lease and the types of work completed by or on behalf of the lessee on this lease.”
Division records show that as of March 3 there were 395 active leases in the Cook Inlet area, some 1.1 million acres, with some 423,000 of those acres onshore and some 619,000 acres offshore.
The Cook Inlet sale area consists of 815 tracts ranging in size from 100 to 5,760 acres on state uplands and tide and submerged lands in the Matanuska and Susitna valleys, the Municipality of Anchorage, the western and southern Kenai Peninsula from Point Possession to Anchor Point, the western shore of Cook Inlet from the Beluga River to Harriet Point, and within Cook Inlet.
DNR issued a decision of no substantial new information for the 2014 Cook Inlet and Alaska Peninsula areawide sales in January.
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