A Colorado wildcatter found a huge new North Slope oil field. Now it’s buying up new federal leases in Alaska.

A map of Wednesday’s lease sale shows North Slope Exploration’s winning bids, in blue. (Courtesy Bureau of Land Management)

Armstrong Oil and Gas, the Denver-based independent oil company, is pushing into a big new swath of federal oil leases on the North Slope, after making one of Alaska’s biggest discoveries in years.

North Slope Exploration, a newly-formed company managed by Armstrong, was the biggest bidder in a federal lease sale Wednesday in the National Petroleum Reserve in Alaska, the Indiana-sized area west of Prudhoe Bay.

North Slope Exploration bid roughly $10.5 million to win more than 80 leases, in a swath across the middle of the reserve. They total roughly 1 million acres, an area larger than the state of Rhode Island.

ConocoPhillips and another company, Emerald House, each bid on a few more tracts, and the total area bid on by companies was the most since 2004.

Critics blasted the sale as a “carbon bomb” that would worsen global warming while granting companies cheap access to federal resources. But the Trump administration, which has pushed aggressively to increase oil production on the North Slope, praised the results.

“This, we believe, reflects the continuing interest in developing resources in the largest single block of federally managed lands in the United States,” said Ted Murphy, a top Alaska official with the Bureau of Land Management, which conducted the lease sale.

The reserve had been neglected by industry for years until a pair of major new discoveries were announced in 2017 in a rock formation, the Nanushuk, that extends across the reserve. Companies had drilled dozens of wells into the Nanushuk but largely missed its potential until those two fields were found — one by ConocoPhillips that it’s calling Willow, and another by Armstrong known as Pikka.

The search for Pikka was recounted in a recent Wall Street Journal profile of the company’s chief executive, Bill Armstrong, which described him as the last of a dying breed — one of the “wildcatters” who search for new and undiscovered oil fields.

While wildcatters were the “longtime stars” of the industry, today’s oil companies are now spending less on exploration and are discovering fewer new deposits, the profile said. It labeled Armstrong “the last prospector” — a quirky Texan who wears jeans and Armani shirts, and dribbles a basketball around an indoor court in his Denver office. He sold his stake in the Pikka field for $850 million to a Papua New Guinea company, Oil Search, that’s now trying to bring the project into production.

Pikka is projected to produce up to 120,000 barrels of oil a day, or about one-fourth of the trans-Alaska pipeline’s current flow.

Armstrong didn’t respond to a request for comment Wednesday.

Trump administration critics quickly attacked the lease sale results on both environmental and fiscal grounds. The left-leaning, Washington D.C.-based Center for American Progress noted that Alaska is already the country’s fastest warming state, and pointed out that the leases were sold for an average of roughly $11 an acre.

“Oil speculators are getting a sweetheart deal and taxpayers are getting the shaft,” Senior Fellow Matt Lee-Ashley, who worked in the U.S. Interior Department during the Obama administration, said in a statement. “Today’s bargain basement lease sale is just the latest example of the Trump Administration selling off America’s public lands for pennies on the dollar.”

Lee-Ashley also noted that the bid amounts undercut predictions about how much oil revenue will come from development in the Arctic National Wildlife Refuge, to the east.

The Congressional Budget Office, when lawmakers passed the 2017 tax reform package that opened the refuge’s coastal plain to development, said it expected $1.8 billion in gross revenue from leasing over the following decade.

With roughly 1.6 million acres available for leasing, as the Trump administration has tentatively proposed, meeting the CBO’s projections would require the average price per acre to exceed $1,000.

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