State offers exploration incentives in Cook Inlet

Petroleum News

Alaska is offering exploration incentive credits for 73 offshore Cook Inlet tracts in its 2005 Cook Inlet areawide lease sale.

The Alaska Department of Natural Resources Division of Oil and Gas said Feb. 17 that it will open bids for the North Slope Foothills and Cook Inlet areawide oil and gas lease sales May 19 beginning at 8:30 a.m. at the Loussac Public Library in Anchorage.

The North Slope Foothills sale area lies between the Arctic National Wildlife Refuge and the National Petroleum Reserve-Alaska and is bounded by the Umiat Meridian baseline on the north and by the Gates of the Arctic National Park and Preserve on the south. There are 1,347 tracts ranging in sizes from 1,280 acres to 5,760 acres. Minimum bid is $5 an acre; all leases have a fixed royalty rate of 12.5 percent and a 10-year lease term.

The Cook Inlet sale area is in the Matanuska and Susitna valleys, the Anchorage Bowl, the western and southern Kenai Peninsula from Point Possession to Anchor Point, on the western shore of Cook Inlet from the Beluga River to Harriet Point as well as within Cook Inlet. There are 815 tracts in the Cook Inlet sale area, ranging from 640 acres to 5,760 acres. Minimum bid is $5 an acre; all leases have a fixed royalty rate of 12.5 percent and a seven-year lease term.

The division said 73 offshore tracts have been assigned an exploration incentive credit of $200 per foot drilled for the first exploratory well per tract, not to exceed 20 percent of total well costs.

Credit may be earned during the first three years of the primary term, and is inclusive of other allowed exploration and development credit programs.

A list of tracts eligible for the credit will be available on the division’s Web site: www.dog.dnr.state.ak.us/oil