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License to explore Susitna basin filed State receives new exploration license proposal for Southcentral Alaska; Forest Oil’s Susitna licenses expected soon Kristen Nelson Petroleum News Editor-in-Chief
The state of Alaska is soliciting competing proposals for an exploration license in the Susitna basin and expects to issue a final finding on two other proposed licenses in the area this summer. The Alaska Department of Natural Resources, Division of Oil and Gas, said May 13 that it received a proposal April 29 for an exploration license west of the Parks Highway in the Susitna basin north of Anchorage.
There are two existing proposals for exploration licenses in this area, both submitted by Forcenergy (now Forest Oil) in 2000. The new proposal includes approximately 499,840 acres, and the division said that while it is within the Susitna comment area, it “does not include any of the lands within Forest Oil's exploration license proposals for this general area.”
The Susitna comment area is west of the Parks Highway, and mostly west of the Susitna River, from south of Houston to north of Willow. The area of Forest's proposed licenses goes west almost to Skwentna. The Susitna basin comment area extends beyond the area of Forest's proposed licenses to the southeast, south and north, but primarily to the west.
The applicant's name for the new proposal, along with the exact acreage and work commitment proposed, will be held confidential until it is known whether there are competing proposals, the state said.
Anyone interested in submitting a competing proposal must notify the division by June 12, and submit a complete proposal by July 14. Details are available on the division's web page at www.dog.dnr.state.ak.us.
The division is also accepting comments on the exploration licensing proposal through June 12 and will issue a written finding determining whether to issue the exploration license after the public comment period closes. Program to encourage remote exploration Alaska's exploration license program was established to encourage oil and gas exploration in remote areas of the state outside of known oil and gas provinces on the North Slope and in Cook Inlet. An exploration license gives an exclusive right to explore from 10,000 to 500,000 acres for up to 10 years. The state receives no bonus bid payment, instead the licensee commits to spend money on exploration. If there is competition for a license, the license goes to the party committing the most dollars to exploration.
There is a $1 an acre licensing fee, paid upon acceptance of the proposal.
Once a licensee has met its work commitment, it may convert all or a portion of the license to oil and gas leases. Those leases have annual rental fees of $3 an acre and the state's royalty share of production would be at least 12.5 percent.
Under the program the state accepts proposals each April. Existing licenses, proposals The division has issued two exploration licenses: to Forest Oil in the Copper River basin (398,445 acres with a work commitment of $1.42 million) and to Andex Resources in the Nenana Basin (482,942 acres with a work commitment of $2.525 million). The Copper River basin license was issued in October 2000 and has a five-year term. The Nenana Basin license was issued in October 2002 and has a seven-year term. Forest also has two proposed licenses awaiting an issuing decision by the state: Susitna basin north (399,360 acres with a work commitment of $2.52 million) and Susitna basin south (474,420 acres with a work commitment of $3 million). The proposed licenses are west of the Parks Highway between Willow and Talkeetna.
The state received these Susitna basin exploration license requests from Forcenergy (now Forest Oil) in April 2000. The state released a preliminary finding for the licenses in April 2001 and said it expected to issue a final finding in October 2001, but no such finding has yet been issued.
A division official told Petroleum News May 13 that the Forest proposals are still pending and that a final finding is expected out this summer.
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