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Another Susitna exploration license app Department of Natural Resources asking for comments, competing proposals for license in southern basin area north of Cook Inlet Kristen Nelson Petroleum News
The State of Alaska has drawn another applicant for its exploration license program.
The applicant’s name is confidential because the Alaska Department of Natural Resources’ Division of Oil and Gas is requesting competing proposals, as well as comments, on the proposal.
The application is for acreage in the Susitna basin south of existing exploration licenses which Cook Inlet Energy holds in the area.
On Aug. 19 the division issued a notice of intent to evaluate the oil and gas exploration license proposal, at the same time requesting comments on exploration licenses within the solicitation area, requesting competing proposals and issuing a call for new information on the Susitna basin exploration licenses final finding of the director, issued in 2003.
The division received the license proposal April 29, and said it would evaluate the acceptability of the oil and gas exploration license, while holding confidential the name of the applicant and the provisions of the proposal in accordance with statutes.
The division is requesting comments and competing proposals within the solicitation area, which consists of state-owned land west of Houston and Big Lake in township 18 north, range 5 through 12 west, and township 17 north, range 5 through 12 west, Seward Meridian.
The division said the request for competing proposals covers an area of approximately 356,842 gross acres.
A successful license holder will have the exclusive right to explore state land within the license area for deposits of oil and gas for up to 10 years, the division said. All or a portion of the license area may be converted to standard oil and gas leases after the work commitment specified in the license is met.
Proposal information The division does not have a standard proposal form for exploration license proposals, but requires information including description of the lands subject to the license; the specific work commitment expressed in dollars of direct exploration expenditures; the proposed term of the license; the amount and form of bond or surety to be posted; and verification that the applicant meets minimum qualifications.
If competing proposals are received, the division said the DNR commissioner will request competitive sealed bids.
Comments and competing proposals are due Sept. 19.
See information on the division’s website, www.dog.dnr.alaska.gov/.
Existing Susitna licenses According to the division’s website there are two existing exploration licenses in the Susitna basin: license II, with an effective date of Nov. 1, 2003, currently held by Cook Inlet Energy LLC; and license IV which was issued to Cook Inlet Energy LLC April 1 of this year.
License II, a seven-year license originally issued to Forest Oil Inc. and then held by Pacific Energy Alaska, covers 471,474 acres and has a $3 million work commitment; the division extended that license by three years in late 2010.
License IV, issued to Cook Inlet Energy LLC with an effective date of April 1, 2011, is a 10-year license covering 62,909 acres with a $2.25 million commitment.
The application for license Susitna Basin IV was received by the state April 29, 2010, and noticed for public comment and competitive proposals May 23.
There have been two other licenses or license proposals in the Susitna basin.
Susitna basin I was issued to Forest Oil Inc. effective Nov. 1, 2003, and terminated Nov. 1, 2007. That license was for seven years, covered 386,207 acres and had a work commitment of $2.52 million.
The Susitna basin III license was never issued. It was a seven-year license for 478,584 acres and a work commitment of $2.5 million. Companies proposing licenses have to accept them once they are issued by the state and Clearflame Resources, which had applied for the license, did not accept it.
The state also has exploration licenses in the Copper River and Nenana basins and pending and proposed licenses.
Program to expand exploration The exploration license program was established to promote exploration outside of the state’s established producing areas — the North Slope, the Beaufort Sea and Cook Inlet — and areas included in the state’s areawide leasing program are excluded from exploration licensing. Instead of putting money into competitive bidding for leases, applicants commit money to a work program on the exploration license acreage.
Applicants may propose exploration licenses each April or the DNR commissioner may at any time issue a request for proposals for an area the commissioner designates.
Best interest findings are required and are good for 10 years.
The recipient of a license must post a bond in the amount of the work commitment and pay $1 per acre as a license fee. There are no additional charges during the term of the license. During the license, and following satisfaction of the work commitment, any portion of the licensed area may be converted to oil and gas leases with an annual lease rental of $3 per acre. The term of the leases can extend beyond the original term of the license.
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