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Bonds News

Bidding modest for Alaska North Slope lease sales

ANCHORAGE, Alaska, Oct 24 (Reuters) - Energy companies and private investors bid slightly over $2 million for exploration rights in 121,600 state-owned acres on Alaska’s North Slope and in the Beaufort Sea, according to preliminary results from two oil and gas lease sales held Wednesday by the Alaska Division of Oil and Gas.

Union Oil of California, apparent winner of four onshore tracts near an existing prospect in the North Slope's White Hills area, and ConocoPhillips COP.N unit ConocoPhillips Alaska Inc, which bid on a single offshore tract near its existing Colville River Delta-area development, were the only major companies participating.

Other companies bidding for exploration rights were Calgary-based FEX L.P., AVCG LLC, a Kansas-based independent explorer with several North Slope holdings, Anchorage-based Ultrastar Exploration and Union Energy Alaska LLC, an independent company. A partnership of individual investors bid on remaining acres.

The onshore North Slope sale drew over $1.35 million in bids and the offshore Beaufort sale drew $704,582.40 in bids, according to preliminary results.

Kevin Banks, acting director of the Division of Oil and Gas, said the outcome of the lease sale was satisfactory, considering that little of the prospective acreage in the regions had been available.

“I think that is a good indication that life is still bubbling along on the North Slope,” he told the audience after opening and reading the bids.

Next year’s state lease sales for the North Slope and Beaufort Sea are likely to draw much more attention and heavier bidding because leaseholders are due to relinquish territory that they have failed to develop, Banks told reporters.

“If you ask me what’s going to happen next year, I would say there’s going to be more land available and more tracts bid on,” he said.

The state is hopeful that revoked leases from the Exxon Mobil-operated Point Thomson unit will be among those available next year, Banks said.

The state Department of Natural Resources has dissolved the Point Thomson unit, located just west of the Arctic National Wildlife Refuge, and canceled leases there, citing failure by Exxon Mobil and its partners to develop. The companies have mounted a legal challenge to that state action.

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