Oil Patch Insider

Going once … first public auction of properties in Canada; Itta makes Aiken’s position permanent

The petroleum industry’s version of a yard sale has finally found its way to Canada, where the first public auction of properties was held Dec. 1.

The novelty attracted a crowd of about 300, including 140 registered buyers and 10 sellers.

It was organized by investment banker Tristone Capital, which became affiliated with The Oil & Gas Asset Clearinghouse last year through a C$101 million merger with Petroleum Place Energy Advisors.

The clearinghouse is estimated to control about 90 percent of the auction business in the United States.

Tristone had hoped to generate about C$30 million in sales, but the final tally stalled at closer to C$18 million, with lot prices ranging from C$100 to a successful C$4 million bid by Cinch Energy, a junior E&P which produces about 1,315 barrels of oil equivalent per day.

Tristone tentatively plans three auctions in 2006 and, depending on the response, a move to monthly events in 2007.

Tristone Chief Executive Officer George Gosbee sees the trend as logical in the Western Canada Sedimentary Basin, where 8 percent of properties turn over on an annual basis, compared with just 3 percent in the United States, and where the acquisition and divestiture business often leaves marginal wells on the shelf.

He said auctions are the obvious way to deal with smaller properties, but the key is demonstrating to sellers that their holdings won’t be unloaded at fire-sale prices.

The auctions can also sell royalty interests separately from working interests.

With prices expected to range from C$200,000 to C$15 million, the auctions have special appeal to smaller companies and individuals, who don’t have the resources to go head-to-head with larger rivals when major asset packages come on the market, although Gosbee is counting on larger companies taking the opportunity to consolidate working interests in core areas.

To stir interest in the first auction, Tristone notified 20,000 prospective buyers across North America through a database.

Bates appointed deputy director

Bates was a former natural resource manager for the division involved in the areawide leasing program.

Isenberg donates $750,000 to APU

Eugene M. Isenberg, CEO and chairman of Nabors Industries, has made a $750,000 personal donation to Alaska Pacific University in Anchorage, Alaska. Isenberg’s gift will establish the Eugene M. Isenberg Health Service Administration Endowment Fund, to help support undergraduate and graduate programs in health services administration. One goal of the fund is to create more opportunities for Alaska Natives to receive health services training — APU offers degrees both on its Anchorage campus and through its Rural Alaska Native Adult (or RANA) distance education program.

“Alaska is a special place for me and an important place for our company,” Isenberg said. “My donation will help support a valuable academic program at a highly-regarded Alaska university.”

In October 2005 APU awarded Isenberg its Summa Cum Laude award, in recognition of Isenberg’s donation to the university.

“The health industry, in rural Alaska and in its urban areas, needs local managers so that we do not need to import leadership,” said APU President Dr. Douglas M. North. “Mr. Isenberg’s gift is an impressive philanthropic act that will enable APU to educate the health leaders of the future.”

Nabors Alaska Drilling, a division of Nabors Industries, has operated in Alaska since the first drilling on the North Slope in 1963.

Aiken made permanent director

Aiken replaces Rex Okakok Sr. who retired prior to the recent mayoral election.

Aiken had been serving as acting director in Okakok’s absence.

Oil Patch Insider was written by Gary Park, Alan Bailey and Kay Cashman. News tips should be sent to Cashman via email at [email protected] or call 907 770-3505.