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State sets December date for fall sales
KRISTEN NELSON Petroleum News
The Alaska Department of Natural Resources, Division of Oil and Gas, has set a Dec. 14 date for bid openings for its fall oil and gas lease sales. The bid openings will be held beginning at 9 a.m. Dec. 14 in suites 102 and 104 of the Atwood Building in Anchorage and include three competitive oil and gas lease sales: Beaufort Sea Areawide 2016W, North Slope Areawide 2016W and North Slope Foothills Areawide 2016.
The deadline for bid submission for the sales is Dec. 12 at 4 p.m.
The minimum per-acre bid for the Beaufort sale is $25 per acre and tracts have a 16.67 percent royalty rate. The primary lease term for Beaufort tracts is 8 years with rent at $10 per acre for years 1-6; $100 per acre for year 7; and $250 per acre for year 8.
For both the Beaufort and North Slope sales the division noted that beginning in the year after the year in which sustained production begins on the lease “or the state otherwise determines in its sole discretion, upon request, that the lessee has exercised reasonable diligence in exploring and developing the lease,” the annual rent will be $10 per acre. “In evaluating a request to decrease rental based on the exercise of reasonable diligence, the state will consider the funds expended by the lessee to explore and develop the lease and the types of work completed by or on behalf of the lessee on this lease,” the division said.
Two North Slope regions North Slope tracts are split into two regions, the north sub-region and the south sub-region. The minimum bid in both areas is $25 per acre, but the royalty rate in the north sub-region is 16.67 percent while it is 12.5 percent in the south sub-region.
The primary term for both sub-regions is 8 years and the annual rental rates are the same as for Beaufort Sea leases: $10 per acre in years 1-6; $100 per acre in year 7; and $250 per acre in year 8, subject to the same provisions as apply to the Beaufort leases.
For North Slope Foothills leases the minimum bid is $10 per acre; the royalty rate is fixed as 12.5 percent; and the primary lease term is 10 years. Rental rates for the Foothills are $1 per acre in year 1; $1.50 per acre in year 2; $2 per acre in year 3; $2.50 per acre in year 4; and $3 per acre beginning in year 5.
As has been the case in recent years, the federal Bureau of Land Management will hold its National Petroleum Reserve-Alaska lease sale on the same day as the state sale. Details on the NPR-A sale will be available once they have been published in the Federal Register.
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