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High bids total more than $11M in Cook Inlet sale

Posted: June 22, 2011 - 7:21pm  |  Updated: June 22, 2011 - 7:30pm

ANCHORAGE — State of Alaska petroleum officials who have seen light bidding on Cook Inlet leases in recent years were more than excited Wednesday after opening high bids for 613,690 acres.

“We’re thrilled,” said Bill Baron, director of the state Division of Oil and Gas. “This has been a great day for Alaska, a great day for the Cook Inlet.”

Alaska received just five bids for Cook Inlet region tracts in 2009 and 37 in 2010. The number jumped to 110 this year.

“It’s potentially a rejuvenation, a Renaissance, for the Cook Inlet, not only deep oil targets but shallow gas plays on the way down,” Baron said.

Apache Alaska Corp. was the main bidder, submitting 91 high bids.

A division spokeswoman said preliminary figures would not be available for a few days, but an informal calculation indicates Apache spent approximately $9 million for just more than 515,000 acres.

That will add to 300,000 acres of Alaska Mental Health Trust leases the Houston-based company acquired in its entry into Alaska’s oil business in August.

Contractor Lisa Parker has been assisting the Apache with permits and represented the company at the bid opening. Apache Corp. was established in 1954 and operates around the world, she said.

“They explore for and produce oil and gas,” Parker said. “That is their focus. They don’t have subsidiaries and a lot of other things. Their focus is to explore for and produce oil and gas.”

The company will focus on oil in Cook Inlet.

“Apache believes Cook Inlet is underexplored for oil,” she said.

Apache conducted technology tests in March, using nodal units for seismic work. It has begun applying for permits for seismic testing in the fall.

“We hope to do year-round seismic in Cook Inlet,” Parker said.

Baron said Apache Alaska is now in the state in a big way. Marathon Oil and Aurora Exploration also bid on leases.

“You’ve got an opportunity for independents to come in as well, so this has been across the board just a really good day,” he said.

The enthusiastic bidding likely will translate into jobs, he said.

“You’ve got seismic programs that will take place. You’ve got exploration drilling programs, delineation wells to be drilled, infrastructure to be built, tie into existing infrastructure,” Baron said. “All of that is good jobs for the Cook Inlet and the Peninsula has always had a fairly high unemployment rate relative to the rest of the state.”

Baron said bidding likely was a response to the legislature and governor promoting incentives for Cook Inlet drilling.

Parker agreed that incentives have made investing attractive.

Fairbanks investors Dan Gilbertson, Nick Stepovich, Paul Gavora and Alaska LLC, were a distant second to Apache Alaska as the apparent high bidders on five tracts. Stepovich, a former state lawmaker, said he was proud to be an Alaskan involved in an oil lease sale.

“The highest yield will come when Alaskans are involved in the oil business,” he said.

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