It took more than a year, but Benchmark Oil and Gas, along with other successful bidders, finally received its lease assignments from the State of Alaska for the 20 tracts it won in the May 2006 Cook Inlet areawide lease sale.
The Swedish independent bought its first Alaska leases at that sale, but was on semi-hold for the 14 months that followed.
Just before the leases were issued on July 30, 2007, Benchmark’s exploration adviser Denise Stone told Petroleum News,” we don’t officially consider ourselves leaseholders yet.”
But the company had not been idle.
“We are in the process of gathering information, looking at wells that have been drilled in the area,” Stone said in July. “We’re doing an evaluation as much as we can. … We did buy some seismic and are reprocessing it right now.”
In October, Stone told Petroleum News that Benchmark was “very pleased to receive our leases. … At the moment, we do not have any definite exploration plans. We are still in discussions on how to proceed … with evaluating and prioritizing our leases. We have bought seismic data in certain areas from the open market and are planning to buy more.”
She also said Benchmark was “talking to other operators to see how we might work together,” something another newcomer to Cook Inlet, Armstrong Cook Inlet (see story page 16), said it was doing on the southern Kenai Peninsula where both companies have oil and gas leases.
Leases in three areasBenchmark’s 20 leases are on 110,000 acres in three areas of the Kenai Peninsula: along the north coast of the peninsula, in the central peninsula and north of Kachemak Bay in the southern part of the peninsula. Stone said that the company’s first exploration activities for its acreage involve looking at the work that has already been done in the Cook Inlet basin.
In evaluating the old well data and seismic the company is having to recreate the thinking behind exploration done in the 1960s and 1970s, and then build on that early work, she said.
Cook Inlet dovetails into Benchmark’s strategy of exploring in emerging areas where there are opportunities to use state-of-the-art 3-D seismic technology, Andrew Wight, a Benchmark landman and the company’s general counsel, said after the 2006 lease sale.
“The Cook Inlet in particular is an area that was developed quite some time ago and then it was … put aside, with the focus shifting to the North Slope,” he said. “We think there’s a great opportunity there to apply some new technology. … Technology is really the lynchpin of our business model.”
Wight also said that Benchmark likes to explore in areas that larger companies have found unattractive.
“We feel like that gives us a niche, using our technology, to get in and do some things in areas that have been overlooked or neglected for whatever reason by larger companies,” he said.
Benchmark started out in 1976 as a privately owned Texas independent. However, the Texas-based company went public as Swedish company Benchmark Oil and Gas AB in 2001.
Why Alaska?Onshore Texas is Benchmark’s core area for drilling and production.
Stone attributed the company’s interest in Alaska in part to the efforts of the staff from the Alaska Department of Natural Resources Division of Oil and Gas.
“If it wasn’t for those folks coming down to Houston and being at the American Association of Petroleum Geologists’ conference … and the North American Prospect Expo, if they hadn’t come and told the Alaska story as clearly and confidently as they did, I really don’t think Benchmark would have participated as aggressively as it did in the lease sale,” Stone said.