State Oil & Gas Lease Sale Attracts Two Bidders
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The Division of Oil and Gas received six bids covering 14,080 acres and totaling $467,609 in bonus bids from two bidders, according to preliminary results from the Fall 2021 North Slope, Beaufort Sea, and North Slope Foothills oil and gas lease sale.
The most active bidder was Lagniappe Alaska, which bid on five tracts covering 12,800 acres to the southwest of the Badami unit, in the North Slope Areawide sale. Lagniappe offered an average $33.53 per acre, totaling $429,132. The Louisiana-based independent formed in 2018 and already has a block of about 167,000 acres of leases in that area.
The second successful bidder in the North Slope sale was Savant Alaska, which bid on one tract totaling 1,280 acres adjacent to and south of the Badami unit. Savant offered $30.06 per acre, totaling $38,476. Savant has operated the Badami unit for more than 10 years.
While the state offered 818 tracts totaling 4.3 million acres in the North Slope Foothills sale, and 857,889 acres in 291 tracts in the Beaufort Sea sale, it received no bids in either, according to Tom Stokes, director of the Division of Oil and Gas. He noted 45 percent of the state’s Beaufort Sea acreage is already under lease, as is 40 percent of the North Slope area.
“When you combine that fact with the limited available acreage around known exploration targets throughout the North Slope, and some banks’ current hesitance to lend money for Arctic exploration, it’s understandable that the modest interest in today’s lease sale focused on opportunities close to development infrastructure,” Stokes says.
Following adjudication, leases will be awarded to the successful bidders to explore and potentially develop the leases during a ten-year lease term.
Preliminary results from the sale, which was conducted online, are posted at dog.dnr.alaska.gov. Final results and more details will be posted as they become available.
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Also in this issue: building a company and planning an exit strategy; several ESOPs, and UAS’ foray into a new model for tuition. Enjoy!