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Vol. 22, No. 50 Week of December 10, 2017
Providing coverage of Alaska and northern Canada's oil and gas industry

Repsol big sale bidder

Two state lease sales draw in $21 million, federal NPR-A sale draws $1.2 million

Kristen Nelson

Petroleum News

Alaska did very well in its fall oil and gas lease sales, drawing 19 bids on 16 tracts in the Beaufort Sea areawide, with estimated high bonus bids of $1,247,717.33, and 124 bids on 103 tracts in its North Slope areawide sale, with estimated high bonus bids of $19,939,832. There were no bids in the North Slope Foothills sale.

On the western side of the North Slope, the Bureau of Land Management offered 900 tracts in its National Petroleum Reserve-Alaska, but received only seven bids on seven tracts from ConocoPhillips Alaska and Anadarko Petroleum. Those companies are developing Greater Mooses Tooth in NPR-A and have announced a major discovery in NPR-A at Willow.

Total acreage receiving bids in the NPR-A sale was 79,998 and total bids were $1,159,357. This compares to last year’s NPR-A sale which brought in $18.8 million from four bidding groups, including ConocoPhillips and Anadarko, who accounted for the majority of dollars bid in that sale.

The tracts on which the companies bid in this year’s sale are on the southern border of a large block of tracts they already hold, all on the eastern side of NPR-A.

Beaufort Sea

The state’s Beaufort Sea sale drew 19 bids on 16 tracts from four bidding groups, a total of $1.2 million in apparent high bids on 37,602 acres. Armstrong Energy, an independent with a major position on the North Slope, took one tract in the sale; the other acreage was picked up by small companies and investor groups. J. Andrew Bachner, 90 percent, and Keith C. Forsgren, 10 percent, took all nine tracts on which they bid, ranging from north of the Arctic National Wildlife Refuge in the east to north of Pikka and the Colville River unit in the west, for a total of $757,445.86 for 19,630 acres.

Samuel H. Cade, 75 percent, and Daniel K. Donkel, 25 percent, took five tracts, 13,932 acres primarily north of ANWR and north of Point Thomson, for $350,662.27.

The single tract Armstrong took in this sale is north of Oooguruk. The bid was $75,583.60 for 1,480 acres.

Douglas A. Barr, 75 percent, and Daniel K. Donkel, 25 percent, took a single tract, 2,560 acres, for $64,025.60.

Repsol big bidder

The big bidder of the day was Repsol E&P USA Inc., which took all 45 tracts on which it bid in the North Slope sale for $14,779,488, a total of 67,040 acres, an average of $220.46 an acre, compared to the overall sale average of $110.97 per acre. Repsol accounted for 74 percent of the apparent high dollar bids and 37 percent of the sale acreage.

Armstrong Energy LLC, which partners with Repsol on the North Slope, took 49,120 acres in the sale for $1,452,004.80, an average of $29.56 per acre, for 27.34 percent of the sale acreage and 7.3 percent of the apparent high bids in dollars.

The third-highest per-acre winner was Accumulate Energy, an 88 Energy subsidiary, which took 17,280 acres for $477,446.40, an average of $27.63 per acre, for 2.4 percent of the sale volume and 9.6 percent of the acreage. Another 88 Energy subsidiary, Regenerate Alaska Inc., took 15,520 acres for $902,336, $58.14 per acre. The two subsidiaries combined accounted for $1.3 million of the apparent high bids, some 32,800 acres in the sale.

ConocoPhillips Alaska was apparent high bidder on 15,360 acres for $1,856,563.20, an average of $120.87 per acre, 9.3 percent of apparent high bid dollars for 8.6 percent of acreage.

Smaller entities, without North Slope operations, accounted for the remainder of the sale.

Third largest

In a statement after the sale the Alaska Department of Natural Resources said that ranked by dollar amount the North Slope sale was the third largest since areawide sales began in 1998. DNR said that by average bid amount, some $110 per acre, the sale is the state’s largest since the areawide sales began.

Gov. Bill Walker said the sale results were another indication that the state is attractive to investors. “I am particularly pleased to see Repsol E&P adding to its promising North Slope portfolio and showing strong interest in exploration south of its existing leases in the Pikka Unit,” the governor said.

DNR Commissioner Andy Mack noted the level of competition in the lease sale. “The surge of interest from companies that have been exploring on our lands over the last decade indicates a positive direction for the oil industry on the North Slope,” he said.

“Today’s results are stronger than we expected,” said Division of Oil and Gas Director Chantal Walsh. “On state lands, companies have already leased many of the available tracts. And yet for what acreage was available, we received extremely competitive bids. This indicates that companies are interested in exploring in Alaska,” she said.



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