New company dominates North Slope lease sale

A Louisiana-based independent company formed just days before last Thursday’s Alaska North Slope lease sale bid on and won rights to over half the acreage auctioned off Nov. 15.

Lagniappe Alaska LLC was the only bidder on 120 tracts covering 195,200 acres, according to Alaska Division of Oil and Gas leasing data made available Friday.

One hundred and thirty four leases in total, covering 225,600 acres, were sold Thursday, so Lagniappe dominated the sale.

The company was the top spender, too, laying out $14.8 million of the $29.6 million received by the state for onshore leases as well as tracts sold in the offshore state-owned submerged tracts in the Alaskan Beaufort Sea.

Repsol, a major oil and gas company based in Spain, was the next biggest spender, bidding $13.07 million for onshore tracts near where discoveries have recently been made.

Alaska netted $29.94 million overall in the lease sale combining bids offered for onshore North Slope tracts with state-owned offshore tracts sold.

“We think this was a very successful sale. The apparent high bid totals are the third highest we have received since 1992,” state oil and gas director Chantal Walsh said.

Repsol submitted the highest offer on a single tract of $586 per acre on Tract NS0939 on a west-central North Slope area near where it is a minority owner in Pikka, one of a string of recent new discoveries made in the area. Pikka is now planned for development with Australia-based Oil Search, the majority partner, as operator.

Lagniappe, the newcomer, bid on a large number of tracts in the eastern North Slope area south of the Point Thomson, a major gas field, and west of the boundary of the Arctic National Wildlife Refuge where the federal government is now planning lease sales.

One disappointment was that a plan to offer a three groups of tracts as blocks for bidding in combination with a large amount of seismic data supplied by the state failed to attract any bids.

The state had made the seismic data available to potential bidders.

It was acquired from companies that had received state exploration incentives a decade ago, but was held confidential until earlier this year when the data was published for the lease sale.

Division of Oil and Gas officials were surprised because the state had seen unusually high traffic on the division’s web site after the release of the seismic information, which was interpreted as indications of high interest.

“We’re not sure why there was no interest and we will be asking bidder groups about it,” Walsh said. “We intend to learn from this because we want to make state lands available for exploration in new ways,” and the division had thought that having access to high-quality seismic across groups of leases would stimulate bidding, she said.

However, work requirements that would have been attached to the leases may also have been an impediment, Walsh said.

Repsol acquired 12 leases in total, all in aan area near Pikka and further south along the Colville River where ConocoPhillips has also made discoveries. Oil Search, Repsol’s partner, bid on and acquired four leases also in the west-central North Slope.

Hilcorp Alaska, a North Slope producer, bid on one tract in state-owned submerged lands in the Beaufort Sea near the Liberty project, an oil discovery in federally-owned Outer Continental Shelf water that Hilcorp plans to develop.