Alaska News

A banner day for Cook Inlet oil and gas

Oil and gas companies paid the state more than $11 million Wednesday for the right to drill in Cook Inlet, an area that has seen a resurgence of industry interest lately.

The state received 110 bids for Cook Inlet tracts, the most bids it has received for a Cook Inlet lease sale since 1983.

The amount of money spent was the fourth highest in state history for a Cook Inlet sale, according to Elizabeth Bluemink, a spokeswoman for the state Department of Natural Resources.

DNR Commissioner Dan Sullivan said the sale was a good one for the state.

"I think it shows that Alaska is still viewed as a very attractive hydrocarbon basin," he said. "We hope its going to be a harbinger for what we're hoping will be a very positive October lease sale on the North Slope."

The state plans to offer acreage at an Oct. 26 sale covering the North Slope, North Slope Foothills and state land in the Beaufort Sea. The foothills area last year attracted interest from a small Texas company, Great Bear Petroleum, which is targeting shale oil buried deep beneath the Prudhoe Bay geologic formation that has been tapped for 30 years. State officials expect more interest in that area.

On Wednesday, another strong independent, Apache Alaska Corp., was the big bidder, picking up about 500,000 acres throughout the inlet in about 90 bids. Apache was generally the high bidder in the Cosmopolitan prospect, a confirmed oil discovery where some leases were relinquished earlier this year. Apache's acreage is on the east side of Cook Inlet, near Anchor Point. According to state records, the company appears to now be the largest leaseholder in Cook Inlet.

Sullivan noted that Apache is a well-respected company with operations worldwide and "a great track record for getting additional resources out of mature basins."

He said the state worked hard to publicize the sale and the opportunities it offered oil companies and that he thinks that effort paid off.

"I was in front of a lot of companies talking about this lease sale," he said, adding that some of them showed up to bid.

Other successful bidders included Marathon Alaska Production, Cook Inlet Energy, Aurora Exploration and Nordaq Energy, as well as individual bidders.

Sullivan said some of the leases, especially those in areas where there have been discoveries, carry a requirement for early development. The terms for aggressive development did not appear to deter bidders, he said.

Contact Patti Epler at patti(at)alaskadispatch.com

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