$451,595 bid on 8 tracts, 21,268 acres, in Cook Inlet areawide sale

Kristen Nelson

Petroleum News

The Alaska Division of Oil and Gas released preliminary results June 9 for the Alaska Peninsula and Cook Inlet areawide lease sales.

No bids were received in the Alaska Peninsula sale. Bids have been received on Alaska Peninsula tracts in just three sales since the area was first offered in 2005, the division said in a January annual report to the Legislature, with the last bids received in 2014 and no remaining oil and gas leases for the Alaska Peninsula area.

The division received eight bids on eight tracts from three bidders in the Cook Inlet areawide, a total of $451,594.55 on 21,267.69 acres. This was the second Cook Inlet sale to be offered in online sealed bidding. In the first online sale, held in June 2020, the division received three bids from Hilcorp Alaska LLC, for $178,492 in bonus bids.

In this year’s Cook Inlet areawide sale, bidders included Furie Operating Alaska LLC, HEX LLC and Strong Energy Resources LLC.

In a statement after the sale the state said Furie is an established operator at the Kitchen Lights unit in northern Cook Inlet, HEX recently acquired majority working interest in Furie and is a new bidder, while Strong Energy is a new entrant in Cook Inlet.

Furie bid on five tracts, 14,053 acres, for a total of $325,605.23, division records show. The company currently holds some 9,724 acres of state oil and gas leases, 9,713 acres of that offshore in Cook Inlet where it produces natural gas at Kitchen Lights.

One of the tracts Furie took, CI0802, is on the southern Kenai Peninsula adjacent to the producing North Fork natural gas field operated by Vision Operating, a Gardes Holding company. Two of the Furie tracts, CI0348 and CI0349, are adjacent to Furie’s offshore northern Cook Inlet Kitchen Lights unit, which produces natural gas, and two additional tracts, CI0348 and CI0351, are adjacent to CI0348.

Furie’s highest per-acre bid, $56.57 per acre, was for CI0802, the tract near the North Fork gas field.

HEX LLC, which has no existing state leases, bid on two tracts onshore and offshore the Kenai Peninsula just north of Birch Creek, an estimated 5,750.28 acres.

In a statement after the sale results were announced, the HEX Group of Companies said four of the tracts were adjacent to the company-operated Kitchen Lights unit and Julius R production platform.

HEX CEO John Hendrix said the company’s technical teams have “completed a large body of technical work in the past year and our experienced team continues to optimize existing production and to search out opportunities that benefit the company and Alaskans.”

Strong Energy Resources acquired a single lease, offshore the lower Kenai Peninsula northwest of Anchor Point and south of Cosmopolitan, paying $24,499.58 for acreage estimated at 1,464.41 acres. Strong Energy out of Houston, Texas, has two leases on the North Slope in the Umiat area, some 1,622 acres, originally acquired by Woodstone Resources in a 2014 lease sale, and assigned to Strong Energy last August.

Strong Energy as registered with the Alaska Division of Corporations shows James S. Watt as 100% owner.

Watt has been active in Alaska in Southcentral and on the North Slope with Buccaneer and Renaissance.

- KRISTEN NELSON