By OGJ editors
HOUSTON, Sept. 29 -- A sizeable 1980s oil and gas discovery in the Beaufort Sea was the main draw in the latest sale of acreage in federal waters off Alaska.
Three companies bid $8.9 million in apparent high bids for rights to drill on 34 tracts in Beaufort Sea federal lease Sale 186 .
The sale, held in Anchorage, was the eighth in the Beaufort federal planning area since 1979. It offered nearly 1,800 offshore blocks spanning 9.4 million acres for 10-year leases at a 12.5 % royalty rate.
Minerals Management Service Director Johnnie Burton said, "The Beaufort Sea continues to hold the best near-term potential for offshore petroleum reserves on the Alaska OCS."
Near Sandpiper find
ConocoPhillips Alaska Inc. had three apparent high bids for Beechey Point leases, northwest of Prudhoe Bay oil field, totaling $4 million, including the highest bid of the sale, nearly $2.2 million.
These leases are near the former Sandpiper Unit, once operated by BP PLC's Alaska subsidiary, where Shell Oil Co. and BP predecessor Amoco Corp. found oil and gas in the mid-1980s (OGJ, Mar. 3, 1986, p. 32). The discovery well on the manmade Sandpiper gravel island flowed at stabilized rates of 500-2,500 b/d of 40-52° gravity oil through chokes ranging from 30/64 in. to 2 in. Flows in the 12,575 ft well came from two zones in the Sadlerochit below 11,910 ft measured depth. Along with oil, the well produced gas at a rate of 18.5 MMcfd.
BP later sold its Alaska assets to ConocoPhillips predecessor Phillips Petroleum Co. as a condition of its then-pending merger with ARCO.
Alaska independent Armstrong Alaska Inc. offered over $1.3 million for seven leases, five in Harrison Bay and two near Beechey Point.
EnCana Oil & Gas (USA) Inc., a unit of Calgary-based EnCana Corp., won 24 tracts for a total of $3.5 million, 19 in Dease Inlet and 5 near Beechey Point.
In all, bidders exposed $10,175,949 for the tracts.
Five companies bid in the last Beaufort Sea lease sale, Sale 170 in 1998 (OGJ, Aug. 10, 1998, p. 24): BP Exploration (Alaska) Inc., Phillips Petroleum Co., Petrofina Delaware Inc., and a combine of Chevron USA Inc. and ARCO Alaska Inc. The area offered was smaller, only 241 blocks comprising 1 million acres, and the high bids totaled slightly over $6.2 million for 29 tracts.
Prior to that sale, there were two lease sale offerings in Beaufort federal waters during the 1990s: Sale 144, held in 1996, in which about 7.2 million acres were offered for lease, and Sale 124, held in 1991, which offered about 18.5 million acres.
