For the second consecutive year, Hilcorp Energy had free rein over Alaska's annual Cook Inlet oil and gas lease sale.
The Houston-based independent producer was the only company to bid on tracts in the basin, which was revealed Wednesday morning when Division of Oil and Gas officials opened the bids.
Hilcorp, the dominant natural gas supplier in the Inlet, spent about $298,000 on eight lease tracts over 16,636 acres, according to the preliminary results tallied by the division. Its bids ranged from $16 to $25 per acre.
Most of the leases are on the southern Kenai Peninsula in the Anchor Point area near the onshore Nikolaevsk and Deep Creek units. Those units are mostly gas plays, according to Oil and Gas Director Chantal Walsh, but the company also bought to tracts near BlueCrest Energy's Cosmopolitan development on the shores of the Peninsula.
The near shore Cosmopolitan unit holds both oil and gas, but BlueCrest has focused on developing the oil resource first.
Hilcorp also acquired two more leases between the offshore Trading Bay and Kitchen Lights units in the middle Inlet, which is another area with both oil and gas potential.
"We're excited that Hilcorp is still exploring in Cook Inlet," Walsh said after the sale.
In 2017 Hilcorp spent $3.95 million on 20 tracts over both state and federal acreage in the basin.
The state's 2016 Inlet lease sale drew no bids, and industry representatives said that was due in large part to the state Legislature debating whether to end its oil and gas tax credit program for work in the basin at the time, which it did. Companies used the credits to offset their exploration and development costs.
There is also limited interest in Inlet natural gas, as production from the basin supplies the relatively small demand from Southcentral gas and electric utilities and low global LNG prices have killed the economics of exporting Inlet gas.
The plans for the Donlin and Pebble mine projects in Western Alaska include piping Inlet-sourced gas to the mines as feedstock for their on-site power plants. Those projects, as well as the possible reopening of the former Agrium, now Nutrien, fertilizer plant in Nikiski could provide new gas demand and trigger more gas development in the basin, but those plans are all uncertain and at least several years away.