September 23, 2003 --- Vol. 9, No. 93September 2003

MMS Beaufort sale draws $10 million

Three companies bid more than $10 million at the U.S. Minerals Management Service's Sept. 24 Beaufort Sea sale, placing 37 bids on 34 tracts, with 15 in Zone "A" and 22 in Zone "B." The total of high bids was $8,903, 538, MMS Alaska Regional Director John Goll said in summing the sale results, with $10,175,949 exposed.

MMS Director Johnnie Burton told Petroleum News after the sale that she was pleased to see both two large companies, ConocoPhillips and EnCana, and an independent, Armstrong, bidding in the sale.

The agency also likes the location of the bids: "We're pleased to see that EnCana is really stepping out and going into a wildcat area," Burton said, referring to a block of leases that company bid on north of the National Petroleum Reserve-Alaska.

ConocoPhillips Alaska took three tracts for $4 million, bidding $2,151,600 on one tract, the highest single bid in the sale, and $1,201,600 and $646,800 on two other tracts. Armstrong Alaska, a subsidiary of Denver-based Armstrong Resources, which bid $2.6 million in the sale and took seven tracts for $1.4 million, also bid on the three tracts taken by ConocoPhillips.

EnCana was the second highest bidder, at $3.4 million, taking 24 tracts, including the block of tracts Burton referred to, north of NPR-A and adjacent to six existing ConocoPhillips-Anadarko Petroleum leases.

The 15 bids in the "A" area closer to shore and to existing infrastructure included five leases taken by Armstrong Alaska northwest of the company's existing acreage position in the Oooguruk unit, where Pioneer was operator last winter on three exploration wells. Armstrong also took two leases of Kuparuk and Milne Point.

The other "A" leases were the three that ConocoPhillips took for $4 million and on which Armstrong also bid. These leases are in the area of the old Sandpiper wells, northwest of the Northstar unit.

Rick Mott, ConocoPhillips Alaska's vice president of exploration and land, said after the sale that two wells had been drilled on the leases, and while both oil and gas have been found, the wells found predominately gas.

"And this kind of fits with our strategy to be a major gas producer on the North Slope," he said.

Ed Kerr, Denver-based vice president of land and business development for Armstrong, said some of the leases the company acquired played off its success last year in state waters at the Oooguruk unit; others offset Milne Point. While it was outbid by ConocoPhillips at Sandpiper, Kerr said Armstrong got "the things we wanted most."

EnCana took the most tracts, 22, including two in the "A" area and three in the "B" area on the east side between Badami and Endicott and the majority in the block north of NPR-A.

Forest Oil names Leonard Gurule senior vice president for Alaska

Forest Oil said today that it has named Leonard Gurule senior vice president of its Alaska operations. He will be responsible for directing all the company's Alaska activities, the company said in a statement, including exploration, production, drilling and engineering, and will report to Craig Clark, Forest's president and chief executive officer.

Gurule most recently was chairman of the board and CEO of Virginia Indonesia Co. and previously spent 19 years with ARCO. His last position there was as executive vice president operations for ARCO Indonesia and he has also worked for ARCO in Alaska, at both Prudhoe Bay and Kuparuk.

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