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Two exploration license proposals received for Susitna basin State asks for public comment, competing proposals on two 474,240-acre proposals west of Parks Highway in Willow-Talkeetna area Kristen Nelson PNA News Editor
A 60-day clock began ticking May 25 for public comment and competing proposals for two exploration license proposals in the Susitna basin in Southcentral Alaska.
The Alaska Department of Natural Resources Division of Oil and Gas said May 25 that it would evaluate both proposals, received in April — the designated period each year during which proposals can be made to the state. Each area contains 474,240 acres.
Area 1, the more northerly of the two, is west of Talkeetna and south of Petersville and includes part of the drainage of the Kahiltna River. Area 2 is west of Willow and north of Susitna includes parts of the Kahiltna, Yenta and Susitna river drainages. Skwentna is in the northwest quadrant of area 2. Both areas are west of the Parks Highway.
The state map of the area shows two exploration wells in the proposal areas. Union Texas Petroleum drilled the 7,265-foot vertical 1 Pure Kahiltna Unit exploration well on the border between the two areas in 1964. The well was spud Jan. 18 and abandoned March 11. Two intervals were cored and logs were shot.
In area 2, to the south, Union Oil Company of Calif. drilled the 1 Trail Ridge Unit well in 1980 approximately 55 miles northwest of Anchorage. The directional well reached a measured depth of 13,708 feet and a true vertical depth of 12,626 feet. The well was spud May 31 and drilling was completed Dec. 13. The well was initially reported to the state as suspended; its status was changed to plugged and abandoned in 1982.
Comment, competing proposals requested The state is requesting public comment on the two areas as well as competing proposals for exploration licenses. Competing proposals must be between 10,000 and 500,000 acres and may extend beyond the two areas.
Public comments and proposals are due by 5 p.m., July 24. Prospective licensees must notify the Division of Oil and Gas of their intent to submit a competing proposal by June 26.
Proposals must contain a description of the lands proposed for licensing and a map describing the location at a scale of 1:250,000 or greater; a specific work commitment expressed in dollars; a proposed term for the license; amount and form of security to be posed, based on projected cost of planned exploration work.
Before issuing an exploration license, the commission of the Department of Natural Resources must find, in writing, that the license is in the state’s best interest.
Each proposal will require a separate finding. If only one proposal is received for an area, the finding must identify the prospective licensee. If competing proposals are received, the finding will give notice that the division intends to request competitive sealed bids from those prospective licensees.
The successful bidder is the prospective licensee who submits the highest bid in terms of a specified work commitment.
Copper River The Susitna area proposals are the second exploration license proposals the state has received.
The state issued a preliminary best interest finding for a proposed Copper River oil and gas exploration license this January, initiating a 60-day comment period which closed March 20. If DNR decides to issue the license, bids will be to be opened in August.
The proposed Copper River exploration license covers approximately 500,000 acres. A final finding for the Copper River exploration license is expected in July. If there is only one proposal, the final finding will identify the prospective licensee. If, however, there is more than one proposal submitted, then both the amount of work commitment and the identity of applicants will be kept confidential.
If the final finding concludes the license would be in the state’s best interest, then the DNR commissioner will request that each applicant submit a new proposal in the form of a sealed bid. The state said maintaining confidentiality is necessary so as not to influence the final bids. The applicant submitting the highest bid will be awarded the license.
Exploration licensing supplements the state’s conventional oil and gas leasing program by targeting areas outside the state’s known oil and gas provinces — the North Slope, Beaufort Sea and Cook Inlet. Exploration licensing eliminates bonus money. In a license, a bidding company commits to spend money exploring. There is also a rental fee of $1 an acre.
The state receives subsurface geologic information and, should development occur, revenue through royalties and taxes. The state said in the Copper River preliminary finding that it believes exploration license areas are more likely to yield gas than oil, and that those gas reserves could provide sources for local energy consumption.
The state accepts proposals for exploration licenses in April of each year.
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