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North Slope, Beaufort Sea sales generate $28.1 million high bids
Kristen Nelson Petroleum News
The Alaska Division of Oil and Gas received $28.1 million in apparent high bids in its 2018 areawide Beaufort Sea and North Slope oil and gas sales. Bids were opened in Anchorage Nov. 15. The state received no bids in the other sale offered, the North Slope Foothills (see map on page 11).
Division Director Chantal Walsh said after the sale that the North Slope sale, at $27.3 million, was the third largest since 1998 when areawide sales began. And the average bid per acre in that sale, $121, was the highest since 1998, she said.
The state received 147 bids on 133 tracts, 223,680 acres, in the North Slope sale from six bidding groups.
A new bidder, Lagniappe AK LLC, was the high bidder on 120 tracts, the division said (see page 1 story on Lagniappe). Preliminary results from the sale show Lagniappe bidding a total of $14.1 million, an average of more than $72 per acre for 195,200 acres, a large block south of Badami. This acreage is immediately east of a block of 12 tracts held by Oil Search, and south of a large block of acreage which Eni acquired earlier this year from Caelus Energy Alaska. The tracts drew no competing bidders.
Repsol E&P, a partner at Pikka, was apparent high bidder on 12 tracts, some 26,560 acres, for $13.1 million, an average of $492 per acre, on tracts primarily east of Pikka.
Two of those were the only unleased tracts between Repsol and Oil Search acreage some distance south of Pikka.
One of the Repsol tracts is at the southern tip of the Pikka unit. The remaining nine are generally between Brooks Range Petroleum Corp. acreage and that company’s Southern Miluveach unit south of Kuparuk in an area east of Pikka.
On four those tracts Repsol placed the highest bid per acre in the sale, $586. The totals bid for those four tracts, more than $1.5 million each, were also the highest bonus bids on sale tracts.
Prior to the sale Repsol held 234,533 acres of state oil and gas leases.
A bidding group of J. Andrew Bachner, 90 percent, and Keith C. Forsgren, 10 percent, tied with Regenerate Alaska Inc. (each bidding $26.11 per acre) for a tract on the eastern edge of the sale, adjacent to existing Regenerate acreage and ExxonMobil acreage south of Point Thomson.
Regenerate is an 88 Energy subsidiary, and currently holds some 14,194 acres of state oil and gas acreage. Bachner and Forsgren are frequent oil and gas lease sale bidders: Bachner currently holds some 15,513 acres of state oil and gas leases; Forsgren holds some 1,724 acres.
ASRC Exploration LLC and Caracol Petroleum LLC were unsuccessful bidders in the North Slope areawide sale. Caracol is a working interest owner in the Southern Miluveach unit and currently hold some 25,789 acres of state oil and gas leases; ASRC Exploration is the operator of the Placer unit and currently holds some 14,715 state oil and gas lease acres. Neither of those units are in production.
Beaufort Sea sale Oil Search dominated the Beaufort Sea sale, taking four of eight tracts in that sale for $529,368 of the $848,198 bid. The state received 12 bids on eight tracts, 20,270 acres, in that sale.
The Oil Search tracts are north of Pikka, operated by Oil Search, and adjacent to existing Oil Search acreage. The company bid from $48.03 to $57.17 per acre for the tracts, which range in size from 2,080 to 2,880 acres, a total of 10,080 acres.
Hilcorp Alaska took a single tract, 1,680 acres, for $57.52 per acre, at the northwestern corner of the Liberty prospect which Hilcorp is in the process of developing. Hilcorp is a Cook Inlet and North Slope producer, with some 329,677 acres of state oil and gas leases prior to this sale.
J. Andrew Bachner, 90 percent, and Keith C. Forsgren, 10 percent, took three of the seven tracts on which they bid, losing out to Oil Search on the other four. The bidding group paid $26.11 an acre for a total of 10,080 acres. The three tracts are adjacent to each other at Harrison Bay.
SALSA The division had no takers for three packages of tracts, each offered as a block, for which there is publicly available data.
In announcing the block offerings - called Special Alaska Lease Sale Areas or SALSA - in July, Walsh said the division “has gathered and highlighted large amounts of publicly available data that bears on the SALSA areas.”
Each of the three SALSA areas, Harrison Bay, Gwydyr Bay and Storms, has 3-D seismic available, data which was acquired through the state’s tax credit program and available through the Department of Natural Resources for a modest fee, Walsh said in announcing the program this summer.
Two of the SALSA areas were in the Beaufort Sea sale area, Harrison Bay on the coast west of the Colville River unit and Gwydyr Bay on the central North Slope coast between Milne Point and Northstar north of Prudhoe Bay. Storms was in the North Slope sale area, south of Prudhoe Bay and immediately east of the Guitar unit.
Bidders were required to bid on the blocks as a whole. The block sizes varied, with Harrison Bay the largest at some 66,430 acres, Storms at some 30,720 acres and Gwydyr Bay at some 23,040 acres.
- KRISTEN NELSON
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