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State of Alaska issues Bristol Bay exploration license
Kristen Nelson
The Alaska Division of Oil and Gas said Sept. 7 that it plans to issue an exploration license to Bristol Shores LLC for 329,113 acres in the Bristol Bay basin around Dillingham. Only lands for which the state owns the mineral estate are included.
The area of the license is believed to be prospective for natural gas.
Bristol Shores must pay a licensing fee of $1 an acre, and the license has a work commitment of $3.2 million and a primary term of seven years. Upon completion of the required work commitment, the licensee may convert all or a portion of the license area into oil and gas leases. These conversion leases will be for a primary term of 10 years.
The division said in its final finding on the exploration license, also issued Sept. 7, that it designated a study area in the northern portion of the Bristol Bay basin in July 2003 and solicited exploration license proposals for the area. It received a proposal from Evergreen Resources Inc. for an exploration license covering 15 townships north of Naknek and King Salmon. Evergreen proposed a work commitment of $1.45 million and a term of 10 years. Bristol Shores doesn’t overlap Evergreen’s application When the division issued a notice of intent to evaluate the proposal in September, soliciting comments and competing proposals, it received a proposal from Bristol Shores for state acreage within 36 townships and a work commitment of $3.2 million over a 10-year period. The division said the Bristol Shores application did not overlap the Evergreen application, so they were not competing proposals, and in December 2003, Evergreen withdrew its application.
Pat Galvin, petroleum land manager with the division, told Petroleum News Sept. 8 that Bristol Shores has 30 days to accept or reject the exploration license. If they accept the license, they have to pay $1 per acre and the first year’s bond, he said. This is a seven-year license, and Bristol Shores has a $3.2 million work commitment, so they would need to bond one-seventh of the work commitment.
George Shade, a spokesman for Bristol Shores, told Petroleum News in March that Bristol Shores is composed of four elders originally from Dillingham. He said Bristol Shores “is moving forward, we do have some very serious interested people” and plans to help the environment as well as the economy, “to boost jobs and basically concentrate on local hire and concentrate on producing.”
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