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Vol. 12, No. 15 Week of April 15, 2007
Providing coverage of Alaska and northern Canada's oil and gas industry

Alaska offers geothermal acreage

DNR asks for applications, comments on exploration opportunities in Mount Spurr, Augustine Island areas on west side of Cook Inlet

Petroleum News

Interested in steam heat or steam-driven energy? The Alaska Department of Natural Resources is offering geothermal exploration opportunities in the Mount Spurr and Augustine Island areas on the west side of Cook Inlet.

DNRís Division of Oil and Gas said April 10 that the Mount Spurr area consists of 15 tracts of state-owned land ranging from 1,920 to 2,560 acres, a total of some 38,332 acres, northwest of Trading Bay along the southern flank of Mount Spurr. The area includes the east end of Chakachamna Lake and the Chakachatna River.

The Augustine Island area consists of 26 tracts of state-owned land, each approximately 2,560 acres in size, totaling some 65,992 acres. Augustine Island is in Cook Inlet near Kamishak Bay some 60 miles southwest of Homer. The tracts encompass the island and adjacent tidelands.

The division is requesting applications for, and public comment on, geothermal exploration in these areas. Either geothermal prospecting permits or geothermal leases could be issued.

Preliminary tract maps can be viewed at www.dog.dnr.state.ak.us.

DNR may hold competitive sale

Based on responses to the call for applications and comments, the DNR commissioner will determine whether to proceed with a competitive geothermal lease sale, issue one or more non-competitive prospecting permits or cancel the offering.

If more than one application is received on any tract and disposal is found to be in the stateís best interest, the tract will be designated by the commissioner for a competitive lease sale.

If only one application is received for a tract and the disposal is found to be in the stateís best interest the applicant will be issued a geothermal prospecting permit. Applicants and the public will be notified of the commissionerís decision no later than June 30.

Prospecting permits and geothermal leases pay an annual rent, in advance, of $3 per acre. A person may not own or hold an interest in geothermal tracts covering more than 51,200 acres. Leases in commercial production do not count against the acreage limitation.

Non-competitive prospecting permits are issued for a primary term of two years and may be renewed for an additional year.

Competitive geothermal leases are issued for a primary term of 10 years and may be renewed for an additional five years if the lessee is actively engaged in drilling operations. Each geothermal lease is conditioned upon the payment of a royalty of between 10 and 15 percent of the gross revenues derived from the production, sale or use of geothermal leases under the lease.

Applications and comments are due May 14.

Information on filing an application is available on the divisionís Web site.

Geothermal leases have been issued

The division said 16 tracts in the Mount Spurr area were offered in 1983 in a competitive geothermal lease sale; one tract was leased. A second Mount Spurr competitive geothermal lease sale in 1986 resulted in two tracts being leased. The three leases have expired or been terminated.



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