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Repsol scores big in Alaska North Slope lease sale

Anchorage (Platts)--6 Dec 2017 536 pm EST/2236 GMT


Repsol USA was the big winner in the Alaska North Slope areawide lease sale held Wednesday, submitting high bids on 45 tracts of 119 parcels offered.

Repsol also submitted the high bid for the sale of $293.18 per acre on lease tract NS530B, according to a post-sale analysis by the state Division of Oil and Gas.

ConocoPhillips submitted bids near the state's $20 per acre minimum on several tracts it bid one but also bid aggressively in two tracts, submitting bids of $215.95 per acre on both.

In total, Alaska netted $19.9 million in apparent high bids from 11 groups who submitted 124 bids for tracts, said Chantel Walsh, oil and gas division director. "We're extremely pleased with the results," she said.

A series of high bids by Repsol brought the average for all bids to about $111 per acre, the highest amount in a state lease sale in more than a decade, division officials said.

Acreage was also offered separately on state offshore Beaufort Sea leases, but bidding was modest, mainly from independents but with Repsol acquiring one offshore tract.

Armstrong Oil and Gas, Repsol's partner on the North Slope, bid separately in the onshore sale and picked up 10 tracts. ConocoPhillips, a North Slope producer, acquired six tracts.

Accumulate Energy, a joint-venture of two independents, Australia-based 88 Energy and Burgundy Exploration of Houston, acquired 12 tracts.

Repsol bid aggressively for acreage it acquired, offering $194 and $153 per acre in many bids, at times in competition with its partner, Armstong, which made offer that were more modest, typically $35 to $45 per acre.

Repsol senior landman Jason Sebastinas, who attended the sale, said that while his company and Armstrong were bidding against each other a share of the leases acquired by each would be offered to the other under the partnership agreement.

"This is only one of several bidding strategies we considered," Sebastinas said in an interview.

The strongest bids came in an onshore area that follows a geologic trend -- the Nanushak formation -- that extends south of where Armstrong and Repsol have made recent discoveries. ConocoPhillips' bids were in the same area. Armstrong and Repsol are now in the final stages of securing permits for development of their Pikka discovery, which has estimated recoverable reserves of 1.2 billion barrels, the companies have said.

Tracts acquired by Accumuate Energy were on state lands south of the producing Kuparuk River field. Accumulate has been exploring shale formations in the area that could produce oil but its focus most recently has been on conventional oil prospects.

--Tim Bradner, newsdesk@spglobal.com

--Edited by Richard Rubin, newsdesk@spglobal.com




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