The Alaska Division of Oil and Gas held its fall oil and gas lease sales Nov. 18. There were no bids in the Beaufort Sea or North Slope Foothills sales, division Director Corri Feige said at the sale, but the state took in $9.5 million on 186,400 acres, 131 tracts, in the North Slope sale.
In a National Petroleum Reserve-Alaska sale later in the day, the federal Bureau of Land Management received bids on six tracts, for a total of $788,680 on some 28,590 acres.
A map on page 19 shows results from both sales.
ConocoPhillips Alaska Inc. was the only bidder in the BLM sale.
Accumulate Energy Alaska and Burgundy Xploration, bidding jointly, took 121 tracts in the state sale for $4.74 million. Denver-based 70 & 148 LLC took 10 tracts for $4.78 million.
“Today’s lease sale results show continued interest in exploring the North Slope’s shale oil resources, and they indicate that industry realizes the vast energy potential held in this region,” Feige said in a statement after the sale. She also called the sale results “very encouraging in light of the current low oil prices.”
High volume, high bids
The state sale saw two different dynamics: Accumulate Energy Alaska, 77.52912 percent, and Burgundy Xploration LLC, 22.45088 percent, took almost 94 percent of the acreage receiving bids at the sale, 174,240 acres, paying $4.7 million, an average of $27.18 an acre.
Denver-based 70 & 148 LLC took 10 tracts, 12,160 acres, but paid $4.8 million, 50.2 percent of apparent high bids at the sale, for 6.5 percent of the acreage, an average of $392.73 an acre.
70 & 148 outbid ConocoPhillips on three tracts, bidding $3,007.17 per acre on two tracts, the highest per-acre and total bids in the sale, an estimated $1.9 million per tract; on the third contested tract, 70 & 148 bid $1,017.77 per acre, for a total of more than $650,000. These are small tracts, estimated at 640 acres each, and are adjacent on the south to the ConocoPhillips-operated Colville River unit and also adjacent to existing 70 & 148 acreage. ConocoPhillips bid $250 an acre on two of the tracts and $139.08 per acre on the third. These tracts, along with four others on which 70 & 148 had no competition, are on jointly owned state and Arctic Slope Regional Corp. lands.
The other four joint state-ASRC tracts are southeast of Nuiqsut and east of the Colville River, also in an area where 70 & 148 holds acreage.
70 & 148 also picked up three available tracts south of Kuparuk adjacent to acreage it holds by itself and to a large acreage position it holds in partnership with Repsol.
Building acreage
Accumulate and Burgundy took large blocks to the east and west of acreage the companies already hold on either side of the Dalton highway and the trans-Alaska oil pipeline south of Great Bear acreage, an area companies are prospecting for shale oil.
Accumulate Energy Alaska is the U.S. subsidiary of Australian independent 88 Energy. Paul Basinski, founder, president and CEO of Houston-based Burgundy Xploration, said after the sale that this is his fourth lease sale in the state. Prior to this sale, Burgundy held some 12,273 acres of state acreage while Accumulate Energy held some 85,909 acres. The partnership split in the 174,240 acres the companies acquired in the sale will give Accumulate some 135,122 additional acres and Burgundy some 39,118 additional acres.
The companies are in the process of drilling their first well, Icewine No. 1, from the Franklin Bluffs gravel pad adjacent to the Dalton Highway. The well, spud Oct. 22, is planned to a total depth of 11,600 feet with a primary objective in the HRZ shale formation. Basinski said the well was at about 8,000 feet, that they were having some mechanical difficulties but hoped to resume drilling soon.
Conoco fills in NPR-A acreage
The six tracts on which ConocoPhillips bid in the NPR-A sale appeared to be fill-in around the Greater Mooses Tooth and Bear Tooth units. On the day of the sale ConocoPhillips announced that it is moving ahead with development of Greater Mooses Tooth 1 (see story on page 1).
Tract H-165, which received the highest total and per-acre bid, is west of and adjacent to Greater Mooses Tooth and south of Bear Tooth. ConocoPhillips bid $199,706 for that tract, $31.90 an acre. ConocoPhillips also bid on the tract south of H-165, which is on the western edge of Greater Mooses Tooth.
The farthest north tract on which ConocoPhillips bid is at the northeast corner of the Bear Tooth unit.
The other three tracts are between Greater Mooses tooth and existing acreage the company holds west of the Colville River.
BLM Alaska Associate State Director Ted Murphy noted after the sale that the state receives 50 percent of the NPR-A lease sale, $394,340.
