5 Bidders Spend $6.8M At Alaska Oil And Gas Land Lease Sale

ANCHORAGE, Alaska (AP) — Alaska auctioned off 44 Cook Inlet tracts for oil and natural gas development Wednesday in a sale that lacked major new bidders but saw established companies adding to their acreage.

“This year what you’re seeing is three primary players — Apache, Hilcorp and Cook Inlet Energy — and basically doing some fill-in work around some of their existing lease,” said state Division of Oil and Gas director Bill Barron. “So that’s all real positive, people are solidifying land holdings to continue to do their exploration and development activities.”

Winning bids covered 234,275 acres — about 366 square miles — on parcels on and off shore.

The annual sale drew just five bidders but together they submitted high bids of $6.8 million, making the sale the second largest since 1999, when the state began the area-wide lease model.

Barron said the sale continued a renaissance for the drilling area south of Anchorage that supplies Alaska’s largest city with natural gas. Alaska received just five bids for Cook Inlet region tracts in 2009 and 37 bids in 2010. The number increased to 110 last year when Apache Alaska Corp. jumped in with 91 high bids.

“This is just a continuation of a really good trend for the inlet,” Barron said. “This is just the next step.”

Houston-based Apache was active again Wednesday, submitting 14 bids, including seven in which the company was high bidder for a total bid amount of $1.8 million. Government relations manager Lisa Parker echoed Barron’s assessment of the sale.
“It’s just filling in where we’ve got some holes in the acreage that we picked up in the past,” she said. “We’ve got a good acreage position in Cook Inlet and we’re conducting seismic right now to determine where to start drilling.”

Neither Parker nor Barron commented on a lawsuit filed by four groups Tuesday against that National Marine Fisheries Service claiming the agency improperly issued exploration permits to Apache for high-intensity seismic exploration. The groups claim the noise will disrupt an endangered species, Cook Inlet beluga whales.

Cook Inlet Energy LLC submitted 18 high bids, including the highest amount per acre, $82.50. The company’s total bid amount was $2.7 million.

Hilcorp Alaska LLC submitted 18 bids on 82,560 acres for a total bid amount of $3.1 million.

Buccaneer Alaska LLC submitted one high bid for $149,760 on 5,760 acres.

William M. Crawford was also successful. His bid of the minimum of $25 per acre was accepted on a 35-acre tract for a total bid amount of $875.

Eight tracts drew more than one bid.

– Huffinton Post

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