North Slope, Beaufort Sea lease sales yield $36 million

A support beam for the Trans Alaska Pipeline System
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ANCHORAGE (KTUU) - North Slope oil and gas was a hot commodity Wednesday as the federal Bureau of Land Management and state Division of Oil and Gas unveiled results of separate lease sales in Anchorage.

Several companies drove up the price of federal and state leases, leading to some of the biggest sales in decades. The two agencies took in a total of $36 million and leased tracts which are collectively similar in size to Delaware.

For the state, nine buyer groups purchased 391 tracts totaling 633,300 acres strewn across northern Alaska and the Beaufort Sea. The land area leased on the North Slope is the most since 2001, and the revenue is the third highest since 1998.

Burgundy Xploration was the biggest state buyer, purchasing slightly less than half of the overall leases in a solo venture; the firm also joined with Accumulate Energy Alaska to purchase another 142,560 acres. ConocoPhillips, Armstrong Energy, Alliance Exploration, Caracol Petroleum, TP North Slope Development, Narwhal, Eni Petroleum U.S., and Alaska LLC also bought leases.

Acculate and Narwhal are newcomers to Alaska, according to the state Department of Natural Resources.

In a news release, Gov. Bill Walker described the results as progress at a time when the state government and energy industry is reeling from low prices.

"As Alaska grapples with a $3.5 billion deficit, these $17.8 million oil and gas lease sales are the first stage to getting much-needed production in our state," he said.

What played into the increased interest is unclear: whether it was recent international deals expected to curb oil production and drive up prices, a president-elect who is friendly to fossil fuels and resource development, various companies reacting to promising finds in areas like the Kuparuk River field, or something else entirely.

Department of Natural Resources Commissioner Andy Mack declined to speculate beyond saying that companies bidding on state leases tend to take a long-term approach to investment.

"It's really hard to tell," he said during a news conference. "We're just excited these companies came."

BLM collected $18.8 million in bid receipts -- half of which will be transferred to the State of Alaska -- the most since 2011, when the agency first offered annual lease sales for tracts of the National Petroleum Reserve in Alaska.

ConocoPhillips dominated bidding in the federal lease sales. Anadarko and E&P Onshore also submitted bids.

“We have demonstrated to all stakeholders our ability to move forward with development while also satisfying the needs for conservation," Bud Cribley, BLM's state director for Alaska, said of the sale. "This sale is in line with the Administration’s direction to balance safe and responsible resource development in the NPR-A with protecting the subsistence resources of Alaska Natives and the habitat."

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