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State, AMHT Land Office holding sales State sales covering North Slope, Beaufort Sea and Foothills regions, Alaska Mental Health sale includes Northern Dancer No. 1 Eric Lidji For Petroleum News
The State of Alaska has announced areawide oil and gas lease sales this fall for the North Slope, Beaufort Sea and Brooks Range Foothills, and the Alaska Mental Health Trust Authority is currently taking bids for an oil and gas lease sale in the Cook Inlet basin.
The Trust Land Office is offering 51,008 acres in 10 tracts in the Cook Inlet, including acreage where Storm Cat Energy drilled the Northern Dancer No. 1 well in 2006.
The tracts span the north end of the basin, with seven in the Matanuska-Susitna Borough, north of Anchorage, two east of Soldotna and one spread dis-contiguously in three blocks along the shoreline south of Soldotna and one block on the southern tip of Kalgin Island.
The Mat-Su acreage includes the Northern Dancer No. 1 well.
After picking up Alaska Mental Health Trust and State of Alaska leases around Big Lake, Storm Cat Energy drilled the well through coal formations to a conventional gas target.
Northern Dancer No. 1 found gas, but Storm Cat Energy never tested the well. After a shake-up of its top management, the company left the state. “Alaska is not in our core areas, and we had pipeline and service access issues there,” Storm Cat Energy spokesman told Petroleum News in 2007. “We certainly believe our prospect is very good. However, given limited capital, our decision was economically based in terms of risk-reward.”
Previous exploration in the region goes back decades, and includes ventures looking for oil, conventional natural gas and coal-bed methane. The only current leaseholders in the area are Apache Corp. to the east and west and Linc Energy Alaska Inc. to the south.
The terms of the sale require the higher bidder of the tract containing Northern Dancer No. 1 to test the well for commercial production during the primary term and post a $100,000 bond to guarantee it will properly abandoned the well, if it is noncommercial.
The minimum bid for all tracts is $25 per acre.
The primary term for Tract 29, the tract containing the Northern Dancer No. 1 well, is five years. The primary term for the other tracts is 10 years. The rental rate for Tract 29 is $10 per acre. The rental rate for the other tracts is $10 per acre for the first seven years and $250 per acre for years eight through 10, returning to $10 after sustained production.
All tracts have a fixed royalty rate of 12.5 percent.
The Alaska Mental Health Trust is accepted bid through Sept. 18 at 4:30 p.m.
North Slope sales The Alaska Department of Natural Resources has released details about its annual areawide lease sales in the northern half of the state, with bids accepted on Nov. 4.
The North Slope sale includes 1,225 tracts spread across three sub-regions — North, South and Adjacent to Federal Lands — each being offered with separate terms.
The tracts in the North and South sub-regions have a minimum bid of $25 per acre and rental rates of $10 per acre for the first seven years and rising to $250 per acre starting in the eighth year, except if the lease is hosting sustained production. The tracts in the Adjacent to Federal Lands sub-region have a minimum bid of $10 per acre and rental rates starting at $1 per acre and gradually rising to $3 per acre over the first five years.
The royalty rate on the tracts in the South and Adjacent to Federal Land sub-regions is 12.5 percent while the royalty rate on the tracts in the North sub-region in 16.67 percent.
The term for all tracts is 10 years.
The tracts range in size from 640 to 5,760 acres with some tracts divided into parcels.
Beaufort and Foothills The Beaufort Sea sale includes 573 tracts.
The tracts adjacent to the Outer Continental Shelf, the National Petroleum Reserve-Alaska and the Arctic National Wildlife Refuge have a minimum bid of $10 per acre, a royalty rate of 12.5 percent and rental rates rising from $1 per acre to $3 per acre over the first five years. The remaining tracts have a minimum bid of $25 per acre, a royalty rate of 16.67 percent and rental rates rising from $10 per acre to $250 per acre at year eight.
The term for all tracts is 10 years.
The tracts range in size from 640 to 5,760 acres with some tracts divided into parcels.
The Foothills sale includes 1,347 tracts.
All tracts have a minimum bid of $10 per acre, a 12.5 percent royalty rate and rental rates rising from $1 to $3 per acre over the first five years. The term for all tracts is 10 years.
The tracts range in size from 1,280 to 5,760 acres with some tracts divided into parcels.
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