Alaska puts chunks of North Slope up for single bids in unprecedented lease sale

Attention oil explorers: Alaska officials have three flavors of SALSA they would like you to try.

Painful puns aside, Department of Natural Resources officials for the first time have put together large chunks of available North Slope acreage that will each be auctioned off with a single bid during the state's annual fall lease sales held by the Division of Oil and Gas.

The three Special Alaska Lease Sale Areas, or SALSAs, are some of the only remaining swaths of unspoken-for acreage in the middle of one of the country's pre-eminent hydrocarbon basins, and they come with a starter kit of data to inform drilling that any wildcatter should love.

The idea to auction off tracts of leases via a single bid was borne out of discussions about how the state could use the massive amounts of 3D seismic data, well logs and other typically proprietary information that has become publicly available over the past few years.

[In a first, Alaska releases 'huge amount of data' to lure new oil explorers]

"You've got a whole bunch of treasure chests of gold in a dark forest and somebody's wandering around aimlessly in the dark — here's a flashlight. This might help you just a little bit. It's a search tool that also focuses people around the particular areas that we want to promote interest in," said Deputy DNR Commissioner Mark Wiggin.

While the refundable oil and gas tax credit program the state started in 2003 ultimately grew into something that was just too expensive to continue — the Legislature killed it last year — part of the deal of the program was that the data gathered in part with the state's assistance would become public after a 10-year period.

And the state's team of petroleum geologists and software experts has organized that information so it's much easier to locate and use for anyone interested in exploring the Slope.

"The 3D seismic data is kind of what got us rolling to find its highest use," said Oil and Gas Geologist Kevin Frank.

The three SALSAs, starting from the west, include the state waters of Harrison Bay on the Beaufort Sea at 66,430 acres; part of Gwydyr Bay and adjacent onshore areas near the manmade Northstar Island field totaling 23,040 acres; and an area of 30,720 acres dubbed Storms immediately south of Prudhoe Bay.

Each is accompanied by a 3D seismic data set that has become public within the last four years.

But wait, there's more.

The Division of Oil and Gas group also compiled all of the lease and land records for the SALSAs in addition to all the data available from exploration wells drilled in an around those areas into a "one-stop shop" of sorts for anyone who is sick of counting sheep to easily peruse.

"There's always a team of folks that are looking at things, so we're trying to provide what would be important for a team that's doing exploration. At some point you want to know what's the underlying info for the lands and that's what this and these tools get you," Frank said.

Much of the well data is from Alaska Oil and Gas Conservation Commission records, but a lot also comes from the state Geologic Materials Center.

However, Frank added that there are also web links to any references made to exploration well tests in news articles — largely from the Journal's friendly competitors at Petroleum News — or any other public reports.

Cumulatively, the well data is presented in ways that indicate what geologic formation was targeted when the well was drilled, as well as whether or not mud and resistivity logs or core chips and analyses are available for a particular well.

"You can imagine if you don't know much about the Slope and you say, 'Shucks, I don't know where oil is'; this says, that's where oil is. We don't know the reservoir quality but we know based on the reports something flowed to the surface," Wiggin said.

The vast majority of the well information is free, but DNR is charging what Wiggin describes as a "handling fee" for the seismic data. That's because the state officials have spent significant amounts of time verifying the quality of the seismic data and money on new hard drives and servers to hold it.

The data set to one seismic shoot ate up 278 terabytes of hard drive space, according to Wiggin.

Frank described the seismic information as "like the free puppy" that comes with the occasional vet bill.

He noted that the tens of thousands of dollars in fees to access the 3D seismic should be compared against the tens of millions of dollars it would cost to shoot the areas and obtain the data.

A 162 square-mile seismic set shot over Harrison Bay in 2006 can be accessed for about $32,256, for example.

"Put your Visa number in and boom, you've got a seismic shoot," Wiggin remarked.

The final requirements for bidding on the SALSAs are still being hashed out; they'll be released in a public notice later in August, according to Frank, but the bids will be taken and opened as part of the regular North Slope and Beaufort Sea sales.

Neither Frank nor Wiggin were willing to say whether or not they have any expectations for the SALSA bids — Harrison Bay is in the part of the Slope that has become a hotbed for large Nanushuk formation oil finds.

"We're ready to be surprised anywhere different folks see different things and that's kind of the beauty of how this whole thing works," Frank said.

All of the SALSA information is available through the Document Library tab on the Division of Oil and Gas homepage.

Elwood Brehmer can be reached at elwood.brehmer@alaskajournal.com.