Oil cos. bid $15M on Alaska state, federal leases

DAN JOLING
Alaska Division of Oil and Gas Director Bill Barron reads bids for petroleum leases on state land in the Beaufort Sea on Wednesday, Nov. 9, 2012, at the Dena'ina Civic and Convention Center in Anchorage, Alaska. High bids for the Beaufort, North Slope and North Slope Foothills areas totaled $14.2 million. (AP Photo/Dan Joling)

ANCHORAGE, Alaska (AP) — The state of Alaska's annual North Slope petroleum lease earned $14.2 million Wednesday.

That was down from $21 million last year, but Division of Oil and Gas Director Bill Barron saw reason for optimism. The sale was the fourth largest by dollar amount since the state began area-wide lease sales in 1998, covering tracts on the North Slope, in nearshore waters of the Beaufort Sea, and in the North Slope Foothills. The sale attracted interest from major oil companies, independents and new faces.

"Any activity, especially from the major players and some of the minor players, is good for the state," Barron said after opening bids.

Hours later, the Bureau of Land Management opened bids for tracts within the National Petroleum Reserve-Alaska, which also adds money to state coffers. The state receives 50 percent of lease bids, and two companies — Nordaq Energy Inc. and Woodstone Resources LLC — submitted bids for 14 leases covering 160,088 acres. The high bids totaled $898,900. That means the state's share is $449,450.

Barron saw the bids for the first time as he was reading them to the crowd at the Dena'ina Civic and Convention Center, and he noticed interest by companies including Repsol E&P USA in a western development area of the North Slope. Repsol had high bids for more than 20 tracts.

"It looks like they're looking at some sort of a play between Kuparuk and NPRA," he said. "So it's kind of an interesting filling in of the gap between two primary areas."

Elsewhere, he said, companies gathered acreage around land that they purchased over the last several sales, or competitors filled in gaps.

The Beaufort area accounted for nearly $1.8 million of the state sale. Nordaq Energy was busy in the Beaufort area, submitting high bids on nine tracts in the shallow water, near-shore area.

The North Slope accounted for $11.5 million on total in the state sale. ConocoPhillips, BP PLC, Chevron Corp. and Exxon Mobil Corp. submitted the day's highest bid: $451.77 per acre for one 2,560-acre tract, which added up to just under $1.2 million. ConocoPhillips' share was 55.4 percent and BP's share was 39.3 percent.

The foothills attracted bids for the first time in four years, though only one company submitted them. Anadarko Petroleum Corp. submitted high bids on eight tracts.

The Bureau of Land Management took public recommendations in May and June to determine which tracts to put up for lease.

Nordaq submitted 12 of the 14 bids within the federal NPRA. Ted Murphy, BLM associate Alaska director, said Nordaq's interest in the northwest section of the reserve caught his eye. The leases are in an area where previous leases lapsed.

"That's a nice trend — if it's a trend — looking more in the northwest side, rather than focusing on the northeast, which is where we typically see the leasing around the Alpine area, around Umiat in the south," Murphy said.