No substantial new info for fall sales

The Alaska Department of Natural Resources Division of Oil and Gas has found no substantial new information for the state’s 2014 Beaufort Sea, North Slope and North Slope Foothills areawide oil and gas lease sales.

A call for new information for the sales was issued in March.

The decision, signed by DNR Commissioner Joe Balash in late June, responded to comments from ConocoPhillips Alaska, among them a recommendation that the division offer nine-section, 5,760-acre tracts or four-section, 2,560-acre tracts, as it has traditionally done, rather than subdivisions. ConocoPhillips said the smaller offerings result in greater administrative burden and potential legal description errors.

The response in the decision was that the comment related to the administrative lease sale process, not substantial new information, but that the division would consider the comment when preparing terms and conditions for the lease sales.

The state began dividing 5,760-acre North Slope tracts into four parcels, each 1,440 acres, in 2011, in response to leasing for unconventional development. Division of Oil and Gas Director Bill Barron told Petroleum News in the fall of 2011, when that change was announced, that because one well holds a lease and in unconventional plays like shale more wells are required for development, the idea is that leasing in smaller acreage sizes would increase activity and completion.

Barron said that in trying to work through issues of unconventional development and how wells do and do not connect and how to manage the land, the division decided that breaking leases into smaller tracts would give everyone a better opportunity from the development standpoint.

The change followed the 2010 North Slope areawide lease sale, when Great Bear Petroleum picked up more than 500,000 acres south of Kuparuk and Prudhoe Bay and announced plans to use horizontal drilling and fracking to produce oil from source rocks.

- Kristen Nelson