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State takes in $2.6 million at second North Slope areawide lease sale Bidding heaviest in west, with ARCO, Chevron taking most tracts; Bachner/Forsgren, Burglin, Anadarko, Whites also successful bidders Kristen Nelson PNA News Editor
Oil and gas companies filled in around the edges of existing holdings and picked up expired leases in Anchorage Feb. 24 when 47 bids for 40 tracts from seven bidding groups were opened at the second state areawide North Slope lease sale (see map next page).
The $2.6 million in high bonus bids was small compared to the state’s last North Slope sale, which brought in $51 million, but this sale — the second in what will be annual areawide sales for North Slope tracts — took place less than a year after companies had an opportunity to bid on most of the same acreage.
This sale gave companies an opportunity to bid on leases which had expired or were relinquished since the first areawide North Slope sale in June.
Bidding was led by the state’s largest oil and gas lease acreage holder, ARCO Alaska Inc., bidding by itself and with Chevron U.S.A. Inc. BP Exploration (Alaska) Inc., the state’s second largest oil and gas acreage holder, did not bid at this sale.
North Slope areawide includes approximately 5.1 million acres, with approximately 2.3 million acres available for leasing in this sale. Royalty on tracts in this sale is 12.5 percent; tracts have an initial term of seven years.
The preliminary high bid total was $2,596,838.40. Ken Boyd, director of the Department of Natural Resources Division of Oil and Gas, reminded those attending the sale that final title work for areawide sales is done after the bids are opened, so actual tract size will be a little smaller than the estimated 178,560 acres receiving bids. Bids are based on an amount per acre, so the total amount of high bonus bids from the sale will be a little smaller that the $2.6 million preliminary total. Bidders submitted deposits equal to 20 percent of the total estimated bid.
The highest tract bid was $329,875.20 for tract 453 by a 50/50 partnership of ARCO Alaska and Chevron. That tract also drew the highest bid per acre, $57.27. ARCO, Chevron garner most tracts ARCO Alaska took 16 tracks in 50/50 partnership with Chevron for $1,750,291.20. Bidding by itself, ARCO Alaska took eight tracts for $428,160 for a combined total of $1,303,305.60, 50.2 percent of total high bonus bids. Chevron’s share of the joint bids, $875,145.60, made it the second highest bidder with 33.7 percent of the high bonus bids.
Other successful bidders included a partnership of 95 percent J. Andrew Bachner and 5 percent Keith Forsgren, seven tracts for $192,326.40 (7.4 percent of sale total); Anadarko Petroleum Corp., two tracts, $117,619. 20 (4.5 percent of sale total); Cliff Burglin, four tracts, $51,200 (2 percent); James W. White, one tract, $31,027.20 (1.2 percent); and James A. White, two tracts, $26,214.40 (1 percent).
Mike Richter, ARCO Alaska vice president of exploration and land, told PNA after the sale that the company’s new tracts were all in the west, and said ARCO was just “filling in what we picked up last time.” ARCO accounted for 52 percent of high bonus bid dollars at the first state areawide North Slope lease sale in June. At that sale, ARCO’s total was $27.1 million of the final $51.8 million sale total.
BP Exploration (Alaska), did not bid. “We’ve been pretty aggressive in a number of lease sales over the past few years, and feel we’ve accumulated enough of a prospect inventory that we weren’t interested in building it up at this point. And there wasn’t anything in this sale that we are greatly interested in,” BP Exploration (Alaska) spokesman Paul Laird told PNA after the sale. Most acreage in the west The 16 ARCO/Chevron tracts are all on the western side of the North Slope and all to the south of current production and also south of ARCO’s Alpine and Tarn developments. Seven of the tracts were former BP leases which expired late last year. The tracts are adjacent to ARCO/Chevron leases acquired in the 1998 areawide sale and to an extensive ARCO Alaska lease block.
ARCO Alaska took eight tracts bidding on its own. Those tracts are all south of Alpine, southeast of Nuiqsut.
Five of the seven Bachner/Forsgren leases are also in the west, adjacent to ARCO/BP and ARCO/Chevron tracts.
The other bidder taking tracts in the west was Anadarko Petroleum, which picked up two tracts which had been held by BP at the time of the first areawide sale and which are adjacent to a block of Anadarko and Anadarko/Petrofina tracts south of the Kuparuk River unit. Nine tracts in central, eastern North Slope Of the nine tracts in the central and eastern area of the North Slope receiving bids, four of the apparent high bids were from Cliff Burglin. The Burglin leases are southeast of Deadhorse between the Prudhoe Bay and Badami units. Two of the tracts are the site of old dry holes. The Bachner/Forsgren bidding group took two adjacent leases, also southeast of Deadhorse, one of which was the site of an old Texaco dry hole. James W. White took one lease southwest of Deadhorse, the site of a dry hole, and James A. White took the leases on either side of the James W. White lease.
Three tracts north and west of BP’s 1994 Yukon Gold discovery well, on which leases owned jointly by ARCO, BP and Chevron expired late last year, received no bids. The Yukon Gold is south of the Point Thomson unit and west of the Arctic National Wildlife Refuge.
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