Alaska receives six bids in oil and gas lease sales

Alaska’s Division of Oil and Gas received six bids covering 14,080 acres and totalling US$467,609 in bonus bids from two bidders, according to preliminary results from the Fall 2021 North Slope, Beaufort Sea, and North Slope Foothills oil and gas lease sale held on the 3rd November.


The most active bidder was Lagniappe Alaska LLC, which bid on five tracts covering 12,800 acres to the southwest of the Badami unit, in the North Slope Areawide sale.


Lagniappe offered an average US$33.53/acre, totalling US$429,132. The Louisiana-based independent formed in 2018 and already has a block of about 167,000 acres of leases in the area.


The second successful bidder in the North Slope sale was Savant Alaska LLC, which bid on one tract totalling 1,280 acres adjacent to and south of the Badami unit. Savant offered US$30.06/acre, totalling $38,476. Savant has operated the Badami unit for more than 10 years.


While the state offered 818 tracts totalling 4.3 million acres in the North Slope Foothills sale, and 857,889 acres in 291 tracts in the Beaufort Sea sale, it received no bids in either, said Tom Stokes, director of the Division of Oil and Gas. He noted 45% of the state’s Beaufort Sea acreage is already under lease, as is 40% of the North Slope area.


“When you combine that fact with the limited available acreage around known exploration targets throughout the North Slope, and some banks’ current hesitance to lend money for Arctic exploration, it’s understandable that the modest interest in today’s lease sale focused on opportunities close to development infrastructure,” Mr Stokes said.


Following adjudication, leases will be awarded to the successful bidders to explore and potentially develop the leases during a ten-year lease term.


Source: Oil & Gas Journal