Big acre salesState gets bids on 524,387 North Slope acres, 107,189 acres in Beaufort Kristen Nelson Petroleum News
Nov. 19 saw four oil and gas lease sales in Anchorage - three state and one federal - with companies submitting bids on 708,346 acres. The state’s North Slope areawide sale drew the most interest, attracting 297 bids on 254 tracts, 524,387 acres, making it the fourth largest since areawide sales began in 1999. Of recent sales the state’s 2000 areawide North Slope sale drew the most interest, with 657,520 acres leased.
The Beaufort Sea areawide, drawing 57 bids on 42 tracts, 107,189 acres, is also fourth in interest among recent sales, with the 2011 Beaufort Sea areawide drawing the most interest with 242,796 acres leased.
The federal Bureau of Land Management drew bids on seven tracts, 66,650 acres, while the state’s Foothills areawide only drew bids on only two tracts, 10,120 acres.
Dollar volumes were impressive, $54.5 million for the state’s North Slope areawide, $5 million for the Beaufort Sea sale, $59.7 for the three state sales combined.
These are good numbers compared to areawide sales in recent years, but small compared to the $900 million the state took in at its 1969 North Slope sale (412,548 acres) and the $567.3 million in took in at its 1979 Beaufort Sea sale (296,308 acres).
Building exploration base The bigger news from the sales was the bidders: Caelus Alaska Exploration, new to the state as the operator at Oooguruk, taking over from Pioneer Natural Resources, appeared to be looking for exploration acreage. Prior to the sale the company held 40,373 acres of state leases.
Caelus was apparent high bidder on 263,674 acres in the North Slope sale, 50 percent of the acreage receiving bids in that sale, and apparent high bidder on 59,120 acres in the Beaufort Sea sale, 55 percent of the acreage receiving bids in that sale, for combined acreage of 322,795 acres and more than $15 million in bids.
In the Beaufort Sea sale Caelus topped the bidding, with more than $2.26 million in apparent high bids, 45 percent of the sale’s winning bids, and was second in the North Slope sale with $12.7 million, 23.4 percent of that sale’s apparent high bids.
With the exception of a few outliers, Caelus took tracts in a broad fairly contiguous sweep across the Slope (see map) from south of Prudhoe Bay, adjacent to existing Great Bear leases on the west and south, to south of Point Thomson. In the Beaufort it was bidding against ConocoPhillips on some leases; in the North Slope sale its primary competition was Armstrong affiliate 178 & 48 LLC.
High bids on ‘billion-dollar fairway’ Armstrong affiliate 70 & 148 LLC, which held some 144,639 acres of state oil and gas leases prior to the sale, was apparent high bidder on 179,832 acres, with $38.3 million in apparent high bids across both the sales, the highest bid total of any company, and one which accounted for 64 percent of apparent high bids in the North Slope and Beaufort sales, compared to the 28.5 percent of total acreage on which the company was apparent high bidder.
While the company picked up acreage from the Nikaitchuq area in the Beaufort to large blocks south of Prudhoe - where it competed with Caelus on a number of leases - and south and east of Meltwater, what drew the most attention at the sale was its bids on tracts between Kuparuk and Alpine, the so-called billion-dollar fairway.
The company’s bids on tracts 1037 and 1040 were $2,537.73 an acre, bids of some $6.5 million each for the tracts, the highest per-acre and tract bids in any of the sales. Bids of $1,757.89 per acre for tracts 1041 and 1044, produced bids for those tracts of $4.5 million each. A bid of $1,457.37 per acre for tract 1142 produced a total bid of $3.73 million, and $1,007.73 per acre for tract 1139 produced a total bid of $2.58 million. There was competitive bidding on a number of these tracts, but no per-acre bids in the range of those 70 & 148 put on the table. The company paid an average of $212.70 per acre.
Southern acreage; filling in The third largest bidder in the sales - participating only in the North Slope sale - was Burgundy Xploration of Houston, which added to 8,640 acres it acquired previously as apparent high bidder on 90,720 acres for which it bid $2.59 million. The block of 60-plus of the state’s smaller quarter blocks runs west from the Haul road south of Great Bear acreage.
ConocoPhillips Alaska took 7,396.31 acres in the Beaufort sale, paying $1.36 million, $183.59 per acre.
Great Bear Petroleum Ventures II picked up 5,760 acres, filling a hole in its existing acreage, paying $211.85 an acre for a total of some $1.22 million.
Kuparuk River unit owners ConocoPhillips, BP, Chevron and Exxon Mobil bid $250 an acre for a single 2,560-acre tract adjacent to the southern edge of the unit, $640,000.
Woodstone Resources picked up 8,120 acres near Umiat, paying $32 an acre for a total of $259,840.
Paul Gavora and Alaska LLC, bidding 50/50, picked up 11,660 acres in the Beaufort sale, paying $122,196.80, $10.48 an acre.
Hilcorp Alaska, just taking over from BP as operator of several North Slope fields, took one tract, 2,533 acres, at $71,481.26, in the Beaufort sale, northwest of Milne Point, one of the fields it is now operating.
In the Foothills sale, R3 Exploration Corp., bid on two tracts, 10,120 acres - east of Linc’s proposed Umiat development
NPR-A The federal Bureau of Land Management National Petroleum Reserve-Alaska lease sale drew three bidders and a total of $658,978.20 in bids on seven tracts, some 66,650 acres.
NordAq Energy took five tracts adjacent to a block of six tracts it already holds in central NPR-A, 45 percent of the sale total at $294,342.20.
ConocoPhillips Alaska, 78 percent, and Anadarko Petroleum, 22 percent, took one tract adjacent to the Greater Mooses Tooth unit, bidding $206,201, 32 percent of the sale total.
And ConocoPhillips Alaska took one tract on the southern edge of tracts south of and adjacent to the Greater Mooses Tooth unit, which the company is in the process of developing, paying $158,425, 24 percent of the lease sale total.
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