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Pay leeway in April Alaska lease activity
Kay Cashman Petroleum News
The April lease report from the Alaska Department of Natural Resources’ Division of Oil and Gas shows Brooks Range Petroleum Corp. getting four lease rental payment extensions on April 30. The leases are west and southwest of the Southern Miluveach unit between SMU and the Pikka unit - they are not part of the Mustang project. The leases were all picked up in the state’s Dec. 6, 2017, North Slope areawide lease sale.
The extensions were granted under AS 38.05.020(b)(5). The four leases are ADL 393681, ADL 393682, ADL 393683 and ADL 393686.
As is the custom with many 10 year state leases now, the report shows a ConocoPhillips Alaska lease acquired in the November 2012 North Slope sale as having its annual rental rates for years 8-10 amended to $10 per acre, per the state’s lease terms.
The Kuparuk River unit lease, ADL 392364, was effective April 1, 2013, and went into production June 1, 2015, as part of the Kuparuk participating area. Its rental rate was $10 per acre in its first seven years and then was to convert to $250 per acre in its eighth year, per the state’s lease terms, unless ConocoPhillips applied for the $10 rental rate, and was approved for the rate by the Division of Oil and Gas.
The lease was not eligible for the reduction until the year after the year in which production from it began.
Interest sold to Chevron The division’s April lease report also shows ConocoPhillips Alaska transferring a working interest of 4.9506% in 13 Kuparuk unit Beaufort Sea and North Slope leases (or parts of leases) to Chevron U.S.A., including the Nuna leases that ConocoPhillips recently acquired and absorbed into Kuparuk. A 4%-plus royalty interest was also transferred from ConocoPhillips to Chevron as part of the transaction, which ConocoPhillips said in its application was part of a December sale to Chevron.
It appears the companies are standardizing interest in these 13 leases with the rest of the unit, as Chevron hold a 4.95% working interest in Kuparuk and ConocoPhillips 94.5%.
The leases involved include the following: ADL 3904341, ADL 3905051, ADL 3905061, ADL 3906971, ADL 3919081, ADL 3919091, ADL 3921131, ADL 3921571, ADL 3921581, ADL 3938831, ADL 393884 - all segment 1 of each - and segments A in ADL 393883 and ADL 393884.
- Kay Cashman
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