NOW READ OUR ARTICLES IN 40 DIFFERENT LANGUAGES.
HOME PAGE SUBSCRIPTIONS, Print Editions, Newsletter PRODUCTS READ THE PETROLEUM NEWS ARCHIVE! ADVERTISING INFORMATION EVENTS PETROLEUM NEWS BAKKEN MINING NEWS

SEARCH our ARCHIVE of over 14,000 articles
Vol. 15, No. 22 Week of May 30, 2010
Providing coverage of Alaska and northern Canada's oil and gas industry

Cook Inlet sale draws $2.5M; no takers for Alaska Peninsula

Eight bidder groups placed 38 bids on 36 tracts, a total of 144,640 acres, in Alaska’s 2010 Cook Inlet areawide oil and gas lease sale, held May 26 in Anchorage.

The Alaska Peninsula sale, scheduled at the same time, drew no bidders.

The $2,485,990 in apparent high bids was good for a Cook Inlet sale — only once since Cook Inlet areawide sales were instituted in 1999 has the area drawn more in high bids, $2,857,846 in 2006.

“Perhaps we’re seeing the very beginning of the effect of changing our fiscal system for the Cook Inlet,” Alaska Division of Oil and Gas Director Kevin Banks said after the bids were read.

He had noted before bids were opened that the Legislature made some significant changes this year in production and income tax credits available for Cook Inlet, not all yet signed by the governor. Banks said at least one bill, the “Cook Inlet Stampede Bill” sponsored by Sen. Tom Wagoner, R-Nikiski, which provides incentives for the first three wells drilled with to specific horizons with a jack-up brought to Cook Inlet, created a stir beyond Alaska.

Banks said one investor told him “there’s a certain amount of incredulity in the industry in Texas that the state of Alaska’s actually done something quite so revolutionary as to offer up to 25 million dollars to bring a jack-up rig here and drill the first well.”

Banks said it shouldn’t come as a surprise that the state received no bids for Alaska Peninsula tracts since the federal government has taken the North Aleutian basin off its sale schedule.

He said Alaska will continue to offer acreage in the Alaska Peninsula each year under the areawide leasing program, which keeps the state prepared for changes which may be more favorable to leasing in the area and also keeps its environmental review and a sale planning process in place so companies know the area will be offered and can respond as changes occur.

Cook Inlet Energy tops bidders

Bidders appeared to be filling in around existing lease positions, with acreage from the southern Kenai Peninsula to northwest of Anchorage on the west side of Cook Inlet receiving bids.

The highest per-acre bid came from Cook Inlet Energy LLC, $62 per acre for tract 555; the company also had the highest tract bid, $311,040 on tract 641, $54 per acre.

By comparison, the average per-acre bid for the sale was $17.19.

Cook Inlet Energy, which took over Cook Inlet assets from bankrupt Pacific Energy late last year, also topped the sale with apparent high bids, $908,800 for seven tracts.

It took acreage on the west side, primarily adjoining existing Cook Inlet Energy acreage, from a single tract on McArthur River in the south, to acreage adjacent to Pretty Creek and the North Alexander unit in the north.

Bidding partnerships dominated by Samuel Cade and Daniel Donkel took 10 tracts for $520,876.80. Cade (75 percent) and Donkel (25 percent) took nine of 10 tracts on which they bid; a bidding group of Cade (50 percent), Robert J. Newman (25 percent) Donkel (16.67 percent) and H. Jerry Hodgden (8.33 percent) took one tract.

Tracts acquired by the bidding group include a number in areas where Cade, or Cade and Donkel, already have leases, including the Kasilof area on the Kenai Peninsula side, near McArthur River on the western side of the inlet, west of the Trading Bay field and west of the Susitna River on the west side.

Others also filling in

Buccaneer Alaska LLC had high bids of $267,760 on three tracts: one adjacent to acreage it holds on the southern Kenai Peninsula east of the Nikolaevsk unit, a tract at the southern edge of a block it holds adjacent to the North Cook Inlet gas field and a tract on the west of the Nicolai Creek unit on the west side of Cook Inlet.

Sydney, Australia-based Buccaneer Energy entered Alaska in March when it acquired 57,600 gross acres onshore and offshore from Stellar Oil and Gas.

Escopeta Oil Co. had high bids of $267,405 on seven tracts, all in Cook Inlet adjacent to the company’s Kitchen Lights unit.

Paul Craig had high bids of $199,373 on four tracts on the west side between the Ivan River and Lewis River fields.

Nordaq Energy bid $145,920 for two tracts, one on the northern Kenai Peninsula adjacent to other Nordaq acreage and one in Cook Inlet south of the Middle Ground Shoal oil field.

Monte Allen bid $117,504 on two tracts in the Kalgin Island area at the southern end of the sale area.

Armstrong Cook Inlet bid $58,349 on a single tract at the southwest corner of acreage the company holds on the southern Kenai Peninsula surrounding the North Fork unit and gas field.

—Kristen Nelson



Did you find this article interesting?
Tweet it
TwitThis
Digg it
Digg
Print this story | Email it to an associate.

Click here to subscribe to Petroleum News for as low as $69 per year.


Petroleum News - Phone: 1-907 522-9469 - Fax: 1-907 522-9583
circulation@PetroleumNews.com --- http://www.petroleumnews.com ---
S U B S C R I B E

Copyright Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA)©2013 All rights reserved. The content of this article and web site may not be copied, replaced, distributed, published, displayed or transferred in any form or by any means except with the prior written permission of Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA). Copyright infringement is a violation of federal law subject to criminal and civil penalties.