The Alaska Department of Natural Resources (DNR), Division of Oil and Gas (DO&G), is giving notice pursuant to AS 38.05.945(a)(4) that it is offering State lands for competitive oil and gas leasing in the Beaufort Sea Areawide 2018 (BSA 2018W), North Slope Areawide (NSA 2018W), and the North Slope Foothills Areawide 2018 (FHA 2018) Competitive Oil and Gas Lease Sales. This sale includes the Gwydyr Bay, Harrison Bay, and Storms Blocks within the BSA 2018W and NSA 2018W lease sales. This notice is available on the State of Alaska Online Public Notice System at http://aws.state.ak.us/OnlinePublicNotices/.
In-person bid submission – Tuesday, November 13, 2018 from 9:00 a.m. to 4:00 p.m. at Suite 1100 of the Atwood Building, 550 West 7th Avenue, Anchorage, Alaska or by mail to DNR Division of Oil & Gas, Attn: Lease Sale, 550 W 7th Avenue, Suite 1100, Anchorage, Alaska 99501-3563.
Public bid opening – Thursday, November 15, 2018 from 9:00 a.m. until all bids are read at Kahtnu 1 Meeting Room, Dena'ina Center, 600 West 7th Avenue, Anchorage, Alaska.
Areawide Lease Sale Locations
The Beaufort Sea Areawide is divided into 591 tracts ranging in size from 530 to 5,760 acres. These tracts are within the North Slope Borough (NSB) and consist of state-owned tide and submerged lands in the Beaufort Sea between the Canadian border and Point Barrow. The northern boundary of the Areawide is along the federal Alaska Outer Continental Shelf. The southern fringe of the sale area includes some state-owned uplands lying between the National Petroleum Reserve Alaska (NPR-A) and the Arctic National Wildlife Refuge (ANWR).
The North Slope Areawide is divided into 3,137 tracts, ranging in size from 640 to 5,760 acres. Tracts in this sale area are within the NSB between the Canning River and ANWR on the east and the Colville River and NPR-A on the west. The southern boundary of the sale area is the Umiat Meridian baseline. The Areawide is divided into North and South Sub-regions. Some tracts are jointly owned by the State of Alaska and Arctic Slope Regional Corporation (ASRC).
The North Slope Foothills Areawide is divided into 1,347 tracts ranging in size from 480 to 5,760 acres. These tracts are located between ANWR and NPR-A. The northern boundary of the sale area is the Umiat Meridian baseline and the southern boundary is the Gates of the Arctic National Park and Preserve.
Block Locations
The Gwydyr Bay Block encompasses 23,012.00 acres of state-owned uplands and state-owned tide and submerged lands in 9 leases in the North Slope and Beaufort Sea Areawides. The block is located north of the Prudhoe Bay Unit and east of the Milne Point Unit.
The Harrison Bay Block encompasses 66,275.28 acres of state-owned tide and submerged lands in 21 leases in the Beaufort Sea Areawide. The block is located northwest of the Colville River Unit and southeast of Smith Bay along NPR-A.
The Storms Block encompasses 30,592.00 acres of state-owned uplands in 12 leases in the North Slope Areawide. The block is located south of the Prudhoe Bay and Guitar Units and west of the Trans-Alaska Pipeline System (TAPS).
Blocks offered in this sale are contiguous, State-owned lands where geological and seismic data are available to the public. The Division has not identified and analyzed prospects on the blocks. Sale terms and conditions for each block require a minimum work commitment.
Sale Documents
Complete details regarding these sales are on the DO&G website at http://dog.dnr.alaska.gov/Services/BIFAndLeaseSale under Current Lease Sales. Sale documents include this Notice of Sale, Sale Announcement and Instructions to Bidders, Attachment A with estimated acreages and deferred tracts, lease forms, mitigation measures, Bid Form for DNR Areawide Oil & Gas Lease Sale, and tract map. These documents are also available in the following locations:
Nuiqsut Trapper School Community Library, Nunamiut School Library in Anaktuvuk Pass, Harold Kaveolook School Library in Kaktovik, Meade River School Library in Atqasuk, Tuzzy Consortium Library in Barrow, Alaska Resource Library & Information Services, Z.J. Loussac Public Library in Anchorage, and the Alaska State Library in Juneau.
If you are unable to access lease sale information, call the Leasing Section at (907) 269-8800 or email dog.leasing@alaska.gov. You may subscribe to lease sale email announcements at http://list.state.ak.us/mailman/listinfo/DOG.Leasing.
Sale Terms and Conditions
| Beaufort Sea Areawide 2018W Competitive Oil and Gas Lease Sale Terms and Conditions |
| Lease Sale Tracts | Bid Variable | Minimum Bid | Royalty Rate | Primary Lease Term | Annual Rental Rate | Lease Form |
| All BSA 2018 Tracts | Cash Bonus | $25.00 per acre | 16.66667% Fixed | 8Years* | Years 1-8: $10.00 per acre | DOG201808W |
| *State oil and gas leases may receive a one-time lease extension under certain conditions. AS 38.05.180(m). |
| North Slope Areawide 2018W Competitive Oil and Gas Lease Sale Terms and Conditions |
| Lease Sale Tracts | Bid Variable | Minimum Bid | Royalty Rate | Primary Lease Term | Annual Rental Rate | Lease Form |
| State/ASRC Tracts | Cash Bonus | $25.00 per acre | 16.66667% Fixed | 10Years | Years 1 – 10: $10.00 per acre | DOG201802WAS |
| North Sub-Region Tracts | Cash Bonus | $25.00 per acre | 16.66667% Fixed | 8Years* | Years 1 – 8: $10.00 per acre | DOG201808W |
| South Sub-Region Tracts | Cash Bonus | $25.00 per acre | 12.5% Fixed | 8Years* | Years 1 – 8: $10.00 per acre | DOG201808W |
| *State oil and gas leases may receive a one-time lease extension under certain conditions. AS 38.05.180(m). |
| Foothills Areawide 2018 Competitive Oil and Gas Lease Sale Terms and Conditions |
| Lease Sale Tracts | Bid Variable | Minimum Bid | Royalty Rate | Primary Lease Term | Annual Rental Rate | Lease Form |
| All FHA 2018 Tracts | Cash Bonus | $10.00 per acre | 12.5% Fixed | 10Years | Year 1: $1.00 per acre
Year 2: $1.50 per acre
Year 3: $2.00 per acre
Year 4: $2.50 per acre
Years 5-10: $3.00 per acre | DOG201808 |
| Block Competitive Oil and Gas Lease Sale Terms and Conditions |
| Block | Bid Variable | Minimum Bid | Royalty Rate | Primary Lease Term | Annual Rental Rate | Work Commitment+ | Lease Form |
| Gwydyr Bay | Cash Bonus | $25.00 per acre | 16.66667% Fixed | 8Years* | Years 1-8: $10.00 per acre | Drill Well to Depth by 5th Anniversary as Described in Lease Paragraph 9 | DOG201808WG |
| Harrison Bay | Cash Bonus | $25.00 per acre | 16.66667% Fixed | 8Years* | Years 1-8: $10.00 per acre | Drill Well to Depth by 6th Anniversary as Described in Lease Paragraph 9 | DOG201808WH |
| Storms | Cash Bonus | $25.00 per acre | 16.66667% Fixed | 8Years* | Years 1-8: $10.00 per acre | Drill Well to Depth by 5th Anniversary as Described in Lease Paragraph 9 | DOG201808WS |
| *State oil and gas leases may receive a one-time lease extension under certain conditions. AS38.05.180(m). |
| +State oil and gas lease work commitment terms may modified under certain conditions. AS38.05.180(h) and 11AAC83.700-.705. |
Lease Provision Changes
Lease forms listed in the
Sale Terms and Conditions section of this document include changes from lease forms DOG 201710, DOG 201710W, and DOG 201503W AS most recently used by the Division.
Summary of Changes for DOG 201808 and DOG 201808W
The following lease provision was deleted with re-numbering of subsequent sections:
1. GRANT(b)
The following lease provisions were changed:
9. PLAN OF OPERATIONS (d)(5)
21. RIGHTS UPON TERMINATION (a)
Summary of Changes for DOG 201802W AS
The following lease provisions were added with re-numbering of subsequent sections:
36. LEASE SALES INFORMATION
The following lease provisions were changed:
4. EXTENSION (b), (c), and (d)
5. RENTALS (a), with corrected paragraph numbers
6. RECORDS (a) and (b)7. APPORTIONMENT OF ROYALTY FROM APPROVED UNIT
10. PLAN OF DEVELOPMENT (a) and (b)
13. DILIGENCE AND PREVENTION OF WASTE (d)
15. UNITIZATION (a) and (e)
18. ASSIGNMENT, PARTITION, AND CONVERSION
20. DEFAULT AND TERMINATION; CANCELLATION
23. BONDS (a) and (d)
31. LOCAL HIRE
The following lease provision was added with re-numbering of subsequent sections:
9. WORK COMMITMENT