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Alaska nets $29.9 million in North Slope lease sale; Repsol high bidder

Anchorage, Alaska — Alaska netted $29.94 million in a North Slope lease sale Thursday, the state said, with Repsol submitting the highest bids and small independents acquiring most of the other the acreage.

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Repsol submitted the highest bid of $586/acre on Tract NS0939 on a west-central North Slope area near where it is a minority owner in Pikka, one of a string of recent discoveries in the area. Pikka is now planned for development with Australia-based Oil Search, the majority partner, as operator.

But a Louisiana-based independent company formed just days before the auction, Lagniappe Alaska LLC, dominated the sale, picking up 120 tracts of the 134 leases sold.

Lagniappe was the only bidder on the 120 tracts covering 195,200 acres, according to Alaska Division of Oil and Gas leasing data made available Friday.

The company was the top spender, too, laying out $14.8 million.

Repsol was the next biggest spender, bidding $13.07 million for onshore tracts near where discoveries have recently been made.

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Lagniappe Alaska was incorporated to do business in Alaska by a Lafeyette, Louisiana law firm and lease brokerage, Allen & Kirsme, state Division of Oil and Gas officials said. The firm did not return phone calls Friday.

The 120 tracts acquired by Lagniappe are in a large, contiguous block in the east-central North Slope, several miles inland from the Point Thomson gas field operated by ExxonMobil, which is on the Beaufort Sea coast. The Lagniappe acreage is also near the western border of the Arctic National Wildlife Refuge, where leasing is now planned by the US Bureau of Land Management.

Some of the acreage acquired Thursday by Lagniappe was owned previously by ConocoPhillips but was relinquished, state officials said.

"We think this was a very successful sale," state oil and gas director Chantel Walsh said. "The apparent high bid totals are the third highest we have received since 1992."

The bidding Thursday was for both onshore leases on the North Slope and on state-owned submerged lands in the Beaufort Sea north of the Alaska coast.

However, a plan to offer three groups of tracts as blocks for bidding in combination with a large amount of seismic data supplied by the state failed to attract any bids.

The data was acquired from companies that received state exploration incentives a decade ago, but was held confidential until earlier this year when the data was published for the lease sale.

Division of Oil and Gas officials were surprised because the state had seen unusually high traffic on the division's website after the release of the seismic information, which was interpreted as an indication of high interest.

"We're not sure why there was no interest and we will be asking bidder groups about it," Walsh said. "We intend to learn from this because we want to make state lands available for exploration in new ways."

The division thought that having access to high-quality seismic data across groups of leases would stimulate bidding, she said. But work requirements that would have been attached to the leases may also have been an impediment, Walsh said.

Repsol acquired 12 leases in total, all in an area near Pikka and further south along the Colville River where ConocoPhillips has also made discoveries. Oil Search, Repsol's partner, bid on and acquired four leases in the west-central North Slope.

Hilcorp Alaska, a North Slope producer, bid on one tract in state-owned submerged lands in the Beaufort Sea near the Liberty project, an oil discovery in federally owned Outer Continental Shelf waters the company plans to develop.

-- Tim Bradner, newsdesk@spglobal.com

-- Edited by Jeff Mower, newsdesk@spglobal.com