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Spring oil & gas lease sales dates set
Kristen Nelson Petroleum News
Dates have been set for opening and closing of bids for the state's spring areawide lease sales. The Department of Natural Resources' Division of Oil and Gas said April 18 that bidding will begin May 19 and end June 5 for Cook Inlet and Alaska Peninsula leases, with results available June 11.
The bidding method for the Alaska Peninsula sale will be cash bonus with fixed royalty. The Cook Inlet sale will be net profit share bidding with fixed cash bonus.
EnergyNet Services LLC will conduct the sealed bid auction under contract with the division, with bidder registration and bid submission on the EnergyNet Government Listings site at https://www.energynet.com.
Sale areas There are some 5 million acres in the Alaska Peninsula areawide in 1,004 tracts, ranging from 1,280 to 5,760 acres, encompassing onshore and offshore acreage from the Nushagak Peninsula in the north then along the west side of the Alaska Peninsula to just north of Cold Bay.
Division records show the first Alaska Peninsula sale, in 2005, had 37 tracts awarded (190,474 acres) but interest since then has been spotty, with one tract awarded in 2007 (5,728 acres) and three tracts awarded in 2014 (9,561 acres). There are no active Alaska Peninsula leases remaining from those sales.
There are some 3 million acres in the Cook Inlet areawide, 727 tracts, ranging from 640 to 5,760 acres, encompassing onshore and offshore acreage from Wasilla in the north to Anchor Point in the southeast and along Alaska's Submerged Lands Act boundary in Cook Inlet to the Iniskin Peninsula on the Alaska Peninsula and north toward the Susitna Valley.
In recent years Cook Inlet has had sales of just a few tracts, with eight in 2018 (16,135 acres) the most since 2014, when 32 tracts (83,521 acres) were sold, down from a recent peak of 103 tracts (449,164 acres) in 2011.
Bid specifics Bids in the Alaska Peninsula sale are a minimum of $5 per acre with a 12.5% fixed royalty and a term of 10 years, with rent of $1 per acre in the first year, $1.50 in the second, $2 in the third, $2.50 in the fourth, and $3 in the fifth through 10th years.
The Cook Inlet areawide has a net profit share variable, with a minimum bid of 5% and a fixed cash bonus of $40 per acre. The primary lease term is five years, with a one-time extension possible under certain conditions. Rents are $1 per acre in the first year, $1.50 in the second, $2 in the third, $2.50 in the fourth and $3 in the fifth.
Complete lease sale details are on the division's website at https://dog.dnr.alaska.gov/LeaseSale.
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