Alaska sale draws new playerForest Oil, Storm Cat Energy high bidders at Mental Health Trust lease sale Kristen Nelson Petroleum News Editor-in-Chief
The Alaska Mental Health Trust Land Office held its fourth Cook Inlet oil and gas lease sale Nov. 9, drawing 21 bids on 17 tracts of the 43 offered. This is about twice as many bids as for any of the Trust’s previous sales, said Mike Franger, Trust senior resource manager, at the bid opening in Anchorage. The Trust began offering oil and gas leases in 2001, he said, and before the November sale had almost 100,000 acres under lease.
The Nov. 9 Trust sale drew bids on 80,545 acres from seven bidders, for a total of $768,042.24 in apparent high bids.
Bidders included Cook Inlet operators Aurora Gas, Forest Oil, Marathon Oil and Unocal; two individual bidders, Monte J. Allen and Clyde T. Boyer; and Storm Cat Energy Corp., a Canadian company interested in producing gas from coal. Forest Oil largest bidder at Cook Inlet sale Forest Oil Corp. accounted for almost a third of the sale’s apparent high bids, $247,515.05, taking 17 tracts, some 42,000 acres, on the west side of Cook Inlet west of Point MacKenzie. This is an area with no recent drilling, although three wells were plugged and abandoned in the area in the 1960s. Humble Oil and Refining drilled the Susitna State Unit 1 in section 18, township 15 north, range 4 west, Seward Meridian, in 1963 and 1964, a 12,550-foot well. The company reported finding “sand, shale, siltstone and interbedded coal beds.” The Atlantic Richfield Co. drilled the Lorraine State 1 in section 21 of T14N-R4W, SM, reaching a depth of 8,010 feet, in 1965 and 1966. A sidewall core showed “a very little light oil but no gas” and apparently the formation was too tight to produce. Gulf Oil Corp. drilled the Middle Lake unit 1 well in 1969 in section 22 of T15N-R5W, SM, reaching 9,742 feet. A drill stem test recovered 170 feet of gassy mud. All of these wells were plugged and abandoned.
Prior to this sale Forest held 118,000 acres of state oil and gas leases, primarily in the Cook Inlet basin. Storm Cat Energy new to Alaska Storm Cat Energy was the second highest-dollar bidder, with $203,901.41 for two leases, some 11,800 acres, near Big Lake in the Matanuska-Susitna Borough. ARCO Alaska drilled the 6,200-foot Big Lake BLT-01 to the east in section 22-17N-3W, SM, in 1992, and plugged and abandoned it. The well was later re-entered by Ocean Energy to test for shallow gas, and was again plugged.
The leases bid on by Storm Cat lie just to the west of the Pioneer unit, formerly held by Evergreen Resources, which was acquired by Pioneer Natural Resources. Scott Zimmerman, president of Storm Cat, was formerly with Evergreen.
Clyde T. Boyer was the third highest bidder, $186,276.59 for two tracts on the Kenai Peninsula north and northeast of Nikiski.
Aurora Gas took one tract on the west side of Cook Inlet northwest of Tyonek for $45,312, in an area where Aurora holds considerable acreage.
Monte J. Allen took two tracts for $39,349.40 on the Kenai Peninsula, northeast and southeast of Kenai.
Unocal took one tract in that same area for $27,783.97. These three tracts were the only tracts in the sale receiving multiple bids: Marathon, Unocal and Allen bid on tract 48, which Unocal took. Allen outbid Marathon for the other two tracts.
Marathon took two tracts southeast of Nikiski for $18,003.52.
Per-acre winning bids in the sale averaged $9.54 an acre, ranging from $5.07 an acre to $23.58 an acre, with Boyer having both of the highest per-acre bids, $23.58 an acre and $20.02 an acre.
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