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Hilcorp sole Cook Inlet bidder, takes five tracts, 21,802 acres
Kristen Nelson Petroleum News
Hilcorp Alaska was the sole bidder in the state's spring Cook Inlet areawide oil and gas lease sale, taking five tracts, an estimated 21,801.79 acres, at the fixed price of $40 per acre, for a total of $872,071.60.
The bid variable for the Cook Inlet sale was net profit share, with no royalty. Hilcorp bid the minimum 5% net profit share on all five tracts.
There were no bids in the Alaska Peninsula areawide, held at the same time. The variable for the Alaska Peninsula sale was the cash bonus bid and a 12.5% royalty, with a minimum bid of $5 per acre. There are no active state leases in the Alaska Peninsula areawide sale area. Alaska Peninsula tracts last received bids in 2014
Bids were submitted through EnergyNet beginning May 19, with a June 5 deadline, and bidding results available June 11.
The Department of Natural Resources' Division of Oil and Gas said two of the tracts Hilcorp took are near the former Nikolaevsk unit, where gas continues to be produced; two tracts cover the area of the former Kasilof unit, drilled but not brought into production, and terminated in 2016; the fifth tract is near the Granite Point and Nicolai Creek units on the west side of the inlet where gas is produced.
Net profit share Net profit share bidding began in Cook Inlet areawide sales in 2023 and in the 2023 and 2024 sales held under that system the terms were the same: fixed term of $40 per acre cash bonus and net profit share minimum bid 5%.
When it began offering Cook Inlet leases under a net profit share DNR said fixed royalty and variable bid per acre had been used in Cook Inlet for more than 25 years. The move to net profit share, the division said in 2023, was to help incentivize natural gas production. The 2023 net profit share sale drew winning bids on 14,470 acres, the 2024 sale on 4,441 acres.
'Continued activity and investment in the Cook Inlet is needed now more than ever as we continue to try to secure local natural gas supplies for Alaskans along the Railbelt,' DNR Commissioner John Boyle said after the sale, adding that DNR 'will continue to do all we can to offer highly competitive new leases in the inlet and to actively manage all existing leases to ensure that known resources are brought into development.'
--KRISTEN NELSON
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