The state of Alaska had one of the largest lease sales since it went to the areawide sale system in the late 1990s and the federal Bureau of Land Management, in its 13th National Petroleum Reserve-Alaska sale since 1999, brought in almost as much as the state in apparent high bids, some $36.6 million between all the sales.
Bid openings for the sales were Dec. 14 in Anchorage.
The state received no bids for the areawide North Slope Foothills sale, but received 402 bids on 384 tracts from six bidder groups in the North Slope areawide sale and eight bids on seven tracts from three bidder groups in the Beaufort Sea sale.
BLM received 92 bids on 67 tracts, with five companies or bidding groups participating and all but one having at least one apparent high bid.
Apparent high bids totaled $16.9 million for the state’s North Slope sale and $870,431 in the Beaufort Sea sale. BLM apparent high bids totaled $18.8 million.
The division said that by acreage the 2016 North Slope sale was the second largest of its kind since 1998, when areawide oil and gas leasing began, while by dollar amount the sale was the third largest since 1998.
North Slope
The state received the most bids, 402 on 384 tracts, in the North Slope areawide lease sale, with almost 600,000 acres receiving bids and $16,900,490 in apparent high bids.
Initial bidder group data from the division lists acreage on which bidders or bidder groups bid: Alliance Exploration Inc., 12,800 acres; Accumulate Energy Alaska Inc. and Burgundy Xploration LLC, 142,560 acres; Armstrong Energy LLC 39,080 acres; Burgundy Xploration LLC, 279,360 acres; Caracol Petroleum LLC and TP North Slope Development LLC, 12,800 acres; and ConocoPhillips Alaska Inc., 146,600 acres.
Alliance, based in Nevada, is newly formed; Caracol and TP North Slope have small acreage positions.
Accumulate and Burgundy are in the exploration stage on acreage south of current production; Armstrong is in the process of developing its Pikka unit and has extensive North Slope acreage; ConocoPhillips has extensive North Slope production and operates the Kuparuk River and Colville River units.
A Division of Oil and Gas map of tracts receiving bids shows small areas of acquisition in or near developed areas of the Slope, but the majority of activity is in the acquisition of three large blocks south of existing leased acreage.
Burgundy Xploration was the most active bidder by tract, with apparent high bids on some 190 tracts. The company also bid in conjunction with Accumulate Energy Alaska on almost 100 tracts, with the companies filling in large block positions to the southwest and southeast of acreage they already hold south of Great Bear Petroleum’s position.
Accumulate Energy is a subsidiary of Australian-based 88 Energy Ltd. A Dec. 15 statement from 88 Energy said the net land position for Accumulate, assuming all of the tracts are taken, is now more than 400,000 acres, with a joint venture position, with Burgundy Xploration, of more than 690,000 acres.
The company said the upcoming Icewine No. 2 well will test the flow potential of the HRZ.
ConocoPhillips
While ConocoPhillips Alaska had fewer apparent high bids, it bid on 146,600 acres, more than Burgundy Xploration because fewer of Conoco’s bids were in the area where the state has broken traditional lease blocks into four parts.
In a statement provided by spokeswoman Natalie Lowman, the company said it was pleased with the results of the lease sales and with the acreage it picked up. In addition to bidding on state acreage, ConocoPhillips dominated BLM’s NPR-A sale.
“We’ll be evaluating our plans for this new acreage,” she said. “There are a number of factors that go into decisions on exploration, and we don’t discuss our exploration plans until they are confirmed.”
ConocoPhillips bid heavily in the area adjacent to NPR-A south of existing acreage positions, as did Armstrong Energy, with the two often bidding on the same tracts. ConocoPhillips was most often the apparent high bidder, but Armstrong did place the highest per-acre bid in the sale, $111.07 per acre, on tract 529B, a total bonus bid of $159,940.80, the division said.
Beaufort Sea
The state received eight bids on seven tracts, a total of 33,460 acres, in the Beaufort Sea areawide sale, with the highest bid, $50 per acre, submitted by Eni Petroleum US LLC for a tract on the northern edge of the Eni-operated Nikaitchuq field, a 1,280-acre tract with a total bid of $64,000.
The sum of apparent high bids for this sale was $870,430.80.
The minimum bid per acre for the sale was $25.
Narwhal LLC, a new entrant, bid $25.06 an acre on six tracts on the northern and southeastern edges of a large block of existing Shell leases at Harrison Bay. According to state corporation records Narwhal was formed in early December. The company’s agent is Jesse Mohrbacher, president and CEO of SolstenXP, an Anchorage-based project management company whose services, as listed on its website, include exploration project management.
The six tracts on which Narwhal bid totaled 32,180 acres for which the company bid a total of $806,430.80.
One other bidder, Alaska LLC, an existing small leaseholder, was a competing bidder on the tract which Eni took, bidding $25.39 per acre.
NPR-A
The federal Bureau of Land Management received $18,813,588.93 in apparent high bids at its 2016 National Petroleum Reserve-Alaska lease sale, the 13th sale BLM has held since 1999. Ted Murphy, BLM associate state director, said the agency received 92 bids on 67 tracts, with a total of $22,578,611.78 bid. There are 134 existing leases in NPR-A.
The NPR-A sale was dominated by ConocoPhillips Alaska Inc. ConocoPhillips bid on four tracts by itself but the majority of its bids, 61, were in partnership with Anadarko E&P Onshore, its partner at the Colville River unit.
Armstrong Energy took a single tract on the eastern edge of the sale and was apparent low bidder in four leases taken by ConocoPhillips and the ConocoPhillips-Anadarko bidding partnership, all on the eastern edge of the sale in an area formerly held by Repsol. ConocoPhillips and Anadarko appeared to be filling in a large block of available acreage between existing lease positions, moving west.
NordAq took a single tract adjacent to its existing acreage in mid-NPR-A.
BLM did not break out the per-acre bid amount at the sale.
NordAq bid $61,158.93 on the tract; there were no competing bids.
Armstrong Energy bid $216,229 on the single tract; there were no competing bids.
ConocoPhillips bid $1,295,665 for four tracts, and the bidding partnership of ConocoPhillips and Anadarko bid $17,240,536 on 61 tracts, 92 percent of the apparent high bids in the sale.
The minimum bids for the sale were $25 per acre for tracts designated as high potential and $5 per acre for tracts designated low potential.
By comparison, BLM drew six bids for its 2015 sale, all from ConocoPhillips, with a total bid of $788,680 and an average bid per acre of $31.91 for the 28,589 acres in those tracts.
Murphy noted that the state receives half of the revenues from NPA-A lease sales.
