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THE INDEPENDENTS 2003: Beaufort Sea lease sale draws independents EnCana and Armstrong two of three bidders at September Minerals Management Service sale Kristen Nelson Petroleum News
Three companies bid more than $10 million at the U.S. Minerals Management Service’s Sept. 24 Beaufort Sea sale. Two are independents: Armstrong Alaska and EnCana.
There were 37 bids on 34 tracts, 15 in Zone “A” and 22 in Zone “B” with total high bids of $8,903, 538, MMS Alaska Regional Director John Goll said in summing the sale results.
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, which submitted a total of 10 bids for $2.6 million — including the three tracts won by ConocoPhillips — took seven tracts for $1.4 million.
EnCana was the second highest bidder, at $3,550,158, taking all 24 tracts on which it bid, including a block of 19 tracts north of NPR-A in the Smith Bay area, adjacent to six existing ConocoPhillips-Anadarko Petroleum leases.
Armstrong bids on Sandpiper Sale 186 is the first MMS Beaufort Sea outer continental shelf lease sale since 1998.
The “A” area bids — closer to shore and to existing infrastructure — included five leases taken by Armstrong northwest of the company’s existing acreage position in the Oooguruk unit, where Pioneer was operator for the partnership last winter on three exploration wells on state oil and gas leases acquired by Armstrong.
Armstrong also took two leases adjacent to blocks of offshore state leases north of the Kuparuk River and Milne Point units.
ConocoPhillips took three “A” leases for $4 million — the leases on which Armstrong also bid — in the area of the old Sandpiper wells, northwest of the Northstar unit.
EnCana took two “A” and three “B” leases offshore on the east side between Badami and Endicott.
EnCana was the only bidder for “B” leases, those farther offshore and farther from infrastructure, bidding on 22 tracts, three in the eastern Beaufort and the majority to the west in a block north of NPR-A. There are six existing Conoco-Phillips-Anadarko leases in this area, Goll told Petroleum News after the sale, “so it appears that people think there’s something there.” But there are no wells in the immediate area. It’s in a hole between exploration wells, he said, and MMS will be very interested to see results of seismic exploration in the area.
Armstrong playing off last year’s success Ed Kerr, Denver-based vice president of land and business development for Armstrong, told Petroleum News that some of Armstrong’s bids were for tracts “playing off of our success of last year, drilling in the state waters in the Oooguruk unit.” Other tracts the company won, he said, offset the Milne Point unit. The company is looking forward to doing a lot more in the Beaufort, Kerr said, and still has a lot of work to do with acreage it already owns.
EnCana evaluating Alaska portfolio EnCana spokesman Alan Boras told Petroleum News Sept. 25 that the 24 tracts the company took, some 120,000 acres for approximately $3.5 million, includes about 100,000 acres on the western Beaufort and about 20,000 acres approximately 20 miles northeast of Prudhoe Bay. Prior to this sale, he said, EnCana had 675,000 net acres in Alaska. Asked what the company had planned for its newly acquired acreage, Boras said EnCana would “evaluate existing seismic data and do exploration evaluation with that existing data, as well as looking at whether the company might acquire additional seismic in the future.
“It’s very early days,” he said, but the company will evaluate the prospects on its new leases and plan work in due course.
He said EnCana was pleased with its acquisitions at the sale. It adds to the company’s portfolio of Alaska exploration acreage, he said, and the company continues to evaluate that portfolio.
No wells are planned in Alaska this winter, he said, although the company does plan to drill a well this winter in Canada’s Mackenzie Delta.
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