The state of Alaska received more than $5.2 million in bids for Cook Inlet oil and gas leases during its annual lease sale Wednesday.
Eight different companies bid on tracts, including Hilcorp, Apache Corporation, Woodstone Resources, Pacific West Energy, Cook Inlet Energy, Nordak Energy, WJ Kennedy and William Crawford. A few of the names are new to the state.
“When we open the bids it’s really the first time any of us see who the bidding partners are,” said Bill Barron, oil and gas division director for the Department of Natural Resources. “And it’s exciting to see who they are and it will now be interesting to see what their plans are.”
Tracts are granted to the highest bidder and have a 10-year term of lease. One 5,120-acre tract in particular received three bids for business from two well known producers — Apache Corporation and Hilcorp — and a newcomer, Texas-based Woodstone Resources. Hilcorp won the bid by $1 per acre.
“Competition is always good, especially in the inlet when you’ve got some pretty key players,” Barron said. “You’ve got Cook Inlet Energy, Apache and Hilcorp and it’s good to see them kind of staging around each other.”
Companies use public seismic data and regional geology to make an educated estimate on the oil and gas reserves before bidding.
“You can see that in some of the bid numbers, in how much dollar per acre, especially when it’s competitive,” Barron said. “Some of these are very close, which means they’re looking at the same data and coming up with some of the same assessments on what the value might be.”
A DNR representative said the state received 43 bids total. There were three bids on three tracts in the Alaska Peninsula; the first since 2007.
The North Slope areawide oil and gas lease sale will take place this fall.