Parker Drilling Co.

Parker Drilling Co. drill rig on North Slope.

It may not have been a barnburner of a lease sale, but results of the state’s auction of North Slope oil and gas tracts Jan. 13 show there’s still plenty of interest by industry.

If Alaskans were disappointed by the lack of interest in the first federal lease sale in the Arctic National Wildlife Refuge, they were reassured by the turnout for exploration rights on state-owned lands to the west of the wildlife refuge.

It basically reaffirmed that it was ANWR’s toxic politics, not the geology, that chilled industry interest in the refuge.“Despite economic conditions from COVID-19 and low oil prices seen over the past year, the number of tracts receiving bids and total amount bid is encouraging for the industry’s future. This is good news for Alaskans,” said Tom Stokes, director of the Division of Oil and Gas.

Independent companies dominated the Jan. 13 lease sale. New Guinea-based Oil Search Alaska won rights to 46 leases and Great Bear Petroleum, based In Alaska, secured right to 30 leases. In total, 115 tracts were sold with $7.04 million in bids offered, according to the state Division of Oil and Gas. Most of the tracts sold, or 112, were onshore in the central North Slope region while three offshore tracts in state-owned nearshore waters of the Alaskan Beaufort Sea were sold.

Both Oil Search and Great Bear are active in North Slope exploration and are developing discoveries. Oil Search is working on developing its Pikka discovery near the Colville River, which is near existing producing fields on the slope. Great Bear has been exploring in the central North Slope area south of Prudhoe Bay and is working on developing a small oil discovery.

Great Bear’s new tracts were near its existing leases in two prospective areas the company is developing, Alkaid and Talitha. “Many of the tracts receiving bids have been leased before, with well or seismic survey information linked to them. This means new bidders will be able to leverage available data to refine exploration targets to develop our resources,” Stokes said.

In other bidding, Hilcorp Energy secured three offshore tracts near the Prudhoe Bay Unit in the state-owned Alaskan Beaufort Sea. Lagniappe Alaska LLC, affiliated with Denver-based Armstrong Oil and Gas, won 13 onshore leases. Armstrong has been an active explorer in northern Alaska which led to several discoveries including Pikka, now owned by Oil Search and Repsol, a minority partner.

Lagniappe Alaska’s bids were in an area south of the existing Point Thomson field east of Prudhoe Bay, where ExxonMobil and BP currently operate a gas cycling and condensate production project. Lagniappe owns leases south of the new tracts that were acquired, and the acquisition of the additional nearby acreage reaffirmed the company’s interest in potential of the area.

Meanwhile, Arctic Circle Exploration, a small Alaska-based independent new to the North Slope, won rights to four onshore leases. The state Division of Oil and Gas also offered tracts in the North Slope “foothills” region south of Prudhoe Bay, but there were no bids, the division said.

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