The state’s May 23 Cook Inlet areawide oil and gas lease sale brought in $3,254,496 making it the biggest Cook Inlet sale since two same-day sales in 1993 brought in more than $67.7 million — $65.3 million from the largest of the two, Cook Inlet sale 78, where bidders paid an average of $461.25 an acre for 141,504 acres, taking 36 percent of the acreage offered.
What drew bidders in January 1993 was the excitement generated by ARCO Alaska’s Sunfish oil discovery in upper Cook Inlet, announced in the fall of 1991.
Sunfish was what drew two bidders to tracts north of the North Cook Inlet gas field in this sale, but primarily companies appeared to be picking up acreage around existing units or acreage on the southern Kenai Peninsula or on the west side that may be prospective for gas.
Kevin Banks, acting director of the Alaska Division of Oil and Gas, said after the sale that a typical Cook Inlet sale would have been in the $1.5 million to $2 million range, “so getting a sale that’s twice that is pretty good for us.”
People bought tracts around existing units, he said, including North Cook Inlet and Moquawkie, and Marathon picked up acreage around its west-side units.
Banks said he thinks people have recognized that there will be a market opportunity over time for natural gas. “There’s a market opportunity that’s going to appear; they want to be in place to supply it.”
The sale drew 54 bids from seven bidders on 45 tracts; 213,120 acres were sold, with an average high bonus bid per acre of $15.27.
The sale was dominated by investor Samuel H. Cade who accounted for $1.34 million — 41.2 percent — of the $3.3 million in apparent high bids at the sale.
Cade bid as a 75 percent partner with Daniel K. Donkel, taking 17 tracts, with $889,843.20 in apparent high bids, 27.33 percent of the sale total, and bidding by himself had an additional $672,697.60 in apparent high bids, 20.7 percent of the total, on 10 tracts.
Cade has bid in Alaska sales in the past and state records show him as the holder of almost 80,000 acres of state oil and gas leases. Donkel is a long-time investor in Alaska oil and gas leases; state records show that he currently holds some 38,000 acres of leases.