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Modest bids received in Cook Inlet sale

Posted: May 16, 2012 - 1:59pm

There was only modest bidding May 16 in a Cook Inlet oil and gas areawide lease sale, and an offering of leases on the Alaska Peninsula in southwest Alaska at the same time brought no bids in the sale.

State oil and gas director Bill Barron said the total of apparent high bids was $6.86 million with 44 tracts sold to three independent companies and one individual submitting bids. All 44 tracts offered in the Cook Inlet sale received bids, which covered 200,320 acres.

Most of the bids were near the $25 per acre minimum bid price but Cook Inlet Energy offered several bids substantially higher than the minimum, the highest at $82 per acre.

Barron said the sale results reflected a continued interest by the industry in the Inlet.

“It has been very busy in the last couple of years, with new companies like Apache, Hillcorp, Cook Inlet Energy and Buccaneer exploring,” Barron said at the lease sale.

Cook Inlet Energy, subsidiary of Tennessee-based Miller Energy, is the apparent winner on most leases sold with high bids on 18 tracts acquired followed by Texas-basd Hillcorp, which submitted high bids on 17 tracts. Apache Corp. submitted high bids on eight leases. 

Tracts receiving high bids were mostly near existing producing areas on the east and west side of Cook Inlet. William Crawford submitted the lone by an individual for one tract in the Matanuska-Susitna Borough north of Anchorage.

There were seven leases that brought more than one bid. On six of them Cook Inlet Energy beat out Apache Corp. On the seventh contested lease Hilcorp beat out a bid by Buccaneer Energy, another independent exploring in the Inlet. Buccaneer submitted only one bid for a lease.

All three independent companies submitting bids are current leaseholders in the region. Hilcorp acquired producing assets Chevron Corp., mainly offshore oil and gas producing platforms. Cook Inlet Energy is producing oil and gas from the small field on the west side of the Inlet.

Apache is not a current producer but is now the largest owner of leases in the Cook Inlet region and is engaged in a major multi-year exploration program.

Barron said all high bids are apparent at this point and that final results will be published on the Division of Oil and Gas website Thursday.

The lack of bids in the Alaska Peninsula region was no surprise. The acreage is offered every year as part of the annual Cook Inlet areawide sale, and there have been no bids for Alaska Peninsula leases in recent years.

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