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Vol. 10, No. 21 Week of May 22, 2005
Providing coverage of Alaska and northern Canada's oil and gas industry

Alaska pulls in $1.9M at Foothills, Cook Inlet areawide lease sales

The state of Alaska opened bids for two areawide lease sales in Anchorage May 18, garnering almost $404,000 for 12 Foothills area leases, 11 of them bids from Anadarko Petroleum, and $1.5 million for 55 tracts in Cook Inlet, with Rutter and Wilbanks the largest bidder there at more than $314,000. Bids ranged from $5.04 an acre to $7.18 an acre in the Foothills, and from $5 an acre to $11.26 an acre in Cook Inlet; both sales had a $5 an acre bid minimum. (See Cook Inlet map on page A23 of this issue.)

Alaska Division of Oil and Gas Director Mark Myers said the state received bids on 68,480 acres in the Foothills sale and on 245,120 acres in the Cook Inlet sale.

The state has been leasing Cook Inlet acreage since 1959, when it took in $4 million for 77,191 acres in state lease sale No. 1. Areawide leasing began in Cook Inlet in 1999, when the state took in $1.4 million for 114,514 acres. The 2004 Cook Inlet areawide sale brought in $2.6 million for 363,520 acres.

The state began Foothills areawide leasing in 2001, and took in $9.8 million that year for 858,811 acres.

Anadarko was the largest bidder in the two sales; the only other bidder in the Foothills sale was Arctic Falcon, for a tract near Umiat. Three of Anadarko’s bids are for leases between existing lease blocks the company holds. It also bid on a block of eight leases southeast of those existing blocks.

Cook Inlet bidders

In the Cook Inlet sale, where Rutter and Wilbanks was the largest bidder, a bidding group of Allen, Kay and Donkel bid almost $305,000; Alaska Energy Alliance bid almost $230,000; Storm Cat Energy some $283,500; and a bidding group of Kay and Donkel more than $225,000. Other bidders picked up one or two tracts in the Cook Inlet sale, including Cook Inlet producers Aurora Gas and Forest Oil, and Escopeta Oil which holds some 99,000 acres of state oil and gas leases in Cook Inlet.

Rutter and Wilbanks, a Midland, Texas-based independent oil and gas company, came into Alaska last year in partnership with Forest Oil in the Copper River basin, where it is the operator at an exploration well near Glennallen. Rutter and Wilbanks took a block of onshore leases on the eastern side of the southern Kenai Peninsula, adjacent to the Kenai National Wildlife Refuge. In Cook Inlet the company took tracts to the east and west of Forest acreage south of Redoubt Shoals, and also picked up leases east of ConocoPhillips Alaska’s North Cook Inlet gas field.

Vancouver-based Storm Cat came to Alaska in November, taking two leases near Big Lake in the Matanuska-Susitna Borough at a Mental Health Trust Land Office sale. The company has no production, but late last year signed a deal to drill coalbed methane wells in Mongolia. The eight leases the company took in the state sale are at the northern edge of the Cook Inlet areawide sale area, south and west of Wasilla, and like the company’s Mental Health Trust leases are in the Mat-Su Borough. Storm Cat said last year that it considered the Mental Health Trust leases “prospective for both coalbed natural gas as well as conventional natural gas.”

Scott Zimmerman is president of Storm Cat. Until recently, Zimmerman was vice president of operations and engineering for Denver-based Evergreen Resources, a Rockies-based coalbed methane producer that had been working a coalbed methane prospect in the Matanuska-Susitna Borough north of Anchorage before it was bought out by Pioneer Natural Resources. Pioneer recently dropped the Mat-Su acreage, saying it preferred to focus its attention on its large portfolio of North Slope investments.

Alaska Energy Alliance is a Newport Beach, Calif. corporation. The officers in state paperwork are Stanton and Alexis Snyder.

More than 55 percent of the Cook Inlet bids appear to be from investors, including long-time Cook Inlet investors Dan Donkel and Monte Allen. Donkel assembled and sold to Forest Oil predecessor Forcenergy the acreage now producing at Redoubt Shoal.

—Kristen Nelson

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