The state’s areawide Beaufort Sea and North Slope oil and gas lease sales brought in $3.2 million from eight bidders or bidding groups when bids were read Oct. 25 in Anchorage.
Sales North Slope 2006A and Beaufort Sea 2006A are actually the second sales in those areas this year; the 2005 sales were deferred to March 2006 so that the state could focus on its first Alaska Peninsula areawide sale.
Those sales brought in almost $31 million.
Bill Van Dyke, acting director of the Division of Oil and Gas, said after the sale that considering there were lease sales held just six months ago on the same acreage, it was a good sale and he was pleased to see companies still interested in the acreage.
“Given it’s only been six months, there hasn’t been that much acreage turn over,” he said.
He also said the companies “are starting to understand the new tax system, the PPT (petroleum profits tax), and realize that projects where there’s new spend for exploration and new spend for development, under the PPT their project economics are really enhanced, relative to the old ELF, because of all the credits they get.”
The PPT “really helps with these new projects, and that’s what it was designed to do,” Van Dyke said.
Beaufort draws 15 bids on 13 tracts
AVCG, the only company to bid in both sales, had a total of $836,800 in apparent high bids, 26 percent of the total $3.2 million.
AVCG dominated the Beaufort Sea sale with high bids of $630,400, 92 percent of the $684,723.20 bid in the sale. AVCG took 12 tracts.
Van Dyke said the division received 15 bids on 13 tracts, some 33,280 acres, in the Beaufort Sea sale.
AVCG lost one tract to UltraStar Exploration which took a single tract in the sale for $54,323.20.
AVCG outbid UltraStar by 3 cents an acre on the second of two tracts in the sale with competing bids, tract 319, which had a bid of $21.22 an acre from UltraStar and $21.25 an acre from AVCG.
The AVCG tracts are in two blocks: eight are northwest of tracts the company holds at Gwydyr Bay offshore the Prudhoe Bay and Milne Point units and four are off the northwest corner of the Colville River unit.
The UltraStar tract is in the block northwest of Gwydyr Bay.
North Slope sale draws $2.5 million
The North Slope areawide sale had apparent high bids of $2,530,534.40. Van Dyke said the state received 53 bids on 44 tracts, some 177,280 acres.
Seven bidders or bidding groups participated in the North Slope sale.
Chevron USA bid the most in the North Slope sale, $636,883.20 for five tracts, 25 percent of high bids in the sale.
A bidding partnership of J. Andrew Bachner, 85 percent, Keith C. Forsgren 10 percent and David G. Feddersen 5 percent, took 12 tracts for $486,092.80, 19.2 percent of the North Slope total high bids.
Anadarko Petroleum took nine tracts for $413,804.80, 16.4 percent of the sale total.
Talisman Energy’s FEX LP took seven tracts for $410,054.40, 16.2 percent of the sale total.
AVCG took six tracts for $206,400, 8.2 percent of the sale total.
Samuel H. Cade 75 percent and Daniel K. Donkel 25 percent took four tracts for $202,368, 8 percent of the sale total.
ConocoPhillips Alaska took a single lease for $174,931.20, 6.9 percent of the sale total.
A lot of filling in
A lot of the leasing appeared to be filling in around prospects where companies already held acreage, although Bachner, Forsgren and Feddersen took a sizeable new block, as did FEX.
Anadarko took acreage in two areas: adjacent to the southeast corner of the National Petroleum Reserve-Alaska, adjacent to the Gubik wells (four tracts), and on the eastern side of the slope adjacent to its Jacob’s Ladder unit, one tract on the north of the unit and four tracts on the south.
AVCG took one tract on the northern edge of the Prudhoe Bay unit and five tracts near the eastern border of NPR-A, one of which is adjacent to a substantial block of existing AVCG leases.
Bachner, Forsgren and Feddersen took a block of 12 tracts — all they bid on, six with competing bidders — adjacent to NPR-A south of Nuiqsut. AVCG bid on six of the leases Bachner, Forsgren and Feddersen won, and ConocoPhillips Alaska bid on two, making this the most contested area in the sale.
Cade and Donkel took one tract on the eastern edge of the Prudhoe Bay unit and three tracts near the southeastern corner of the lease sale area, adjacent to the Forest Kemik 1 well.
ConocoPhillips Alaska paid the top per-acre amount in either sale, $30.37, a total of $174.931.20 for tract 368, adjacent to three tracts for which the company paid comparable prices, ranging from $27.38 to $31.16 an acre, in the March 2006 North Slope areawide sale. Tract 368 is in the southwest corner of this block of four tracts; BP’s Ekvik 1 well is in the block on the northeast corner.
Chevron took five tracts in the area where — bidding then as Union Oil of California — it took 48 tracts in the March sale. Three of the new tracts contain old exploration wells: tract 544 Texaco 32-7-8 Wolfbutton; tract 629 Unocal Ruby St. 1; and tract 634, ARCO Toolik Fed 3.
FEX, which has extensive state acreage in Harrison Bay and a large presence in NPR-A, took its first onshore state acreage on the North Slope, a block of seven leases west of the trans-Alaska oil pipeline including the old Atlantic Richfield Susie 1 well.
