Cook Inlet’s largest oil and gas extractor, Houston, Texas-based Hilcorp, will be leasing an additional 16,636 acres of state subsurface mineral rights after it was the only bidder in the Alaska Department of Natural Resources’ 2018 Cook Inlet lease sale.
DNR’s Division of Oil and Gas announced results of the annual sale, typically held in May, on Wednesday.
Hilcorp bid a total of $298,800 for eight-year leases on eight tracts, offering between $16 and $25 per acre. Hilcorp spokesperson Lori Nelson declined to say whether her company has any defined exploration or development plans for the new leases.
Since it entered the inlet by buying Chevron’s assets in summer 2011, Hilcorp has “been a consistent participant in Cook Inlet Areawide lease sales,” according to DNR’s report to the Alaska Legislature on its last five years of lease sales. Hilcorp was also the sole participant in 2017, when it bid a total of $836,501.81 on 24,138 acres in six tracts.
Hilcorp’s two new offshore lease-tracts are immediately north of its Middle Ground Shoal Unit, a field about five miles northwest of Nikiski’s East Forelands area where Hilcorp has four platforms.
Two other new leases are adjacent to the east side of the offshore Cosmopolitan Unit, north of Anchor Point, which BlueCrest Energy operates from an onshore facility near Mile 151 of the Sterling Highway.
Two more straddle the Kenai Peninsula’s coastline just to the north of these.
The final two are east of Hilcorp’s Deep Creek Unit, with one on the northern boundary of Hilcorp’s Nikolaevsk Unit.
DNR began including Cook Inlet in its auction-style lease sales in 1999. In the early 2000s the sales typically brought about $1 million in revenue — split about halfway between the Alaska Permanent Fund and state general fund, with 0.5 percent funding education. In more recent years, sale results have varied with the price of oil. DNR received 39 bids in spring 2014, when oil prices were more than $100 a barrel, but canceled the lease sale for lack of interest when prices were around $45 a barrel in 2016 — the first time since 1999 a Cook Inlet sale received no bids.
Lease properties on the Alaska Peninsula — an area without active oil and gas operations — were offered for sale alongside the Cook Inlet properties but received no bids. The Alaska Peninsula has only received bids in three years since DNR began selling leases there in 2005.
Reach Ben Boettger at firstname.lastname@example.org