Business in brief

Business in brief

No bids for Cook Inlet

oil and gas leases

No bids were opened for state oil and gas leases in Cook Inlet as previously scheduled Wednesday morning.

On Tuesday, the state Department of Natural Resources announced it received no bids for any acreage and cited limited leases available and current depressed prices as the reason.

“We attribute the lack of participation in this lease sale to a protracted period of low prices as well as a limited amount of available acreage around producing areas and infrastructure in Cook Inlet,” said Division of Oil and Gas Director Corri Feige. “The number of state oil and gas leases currently leased in Cook Inlet is above the historical average. Currently, there are 335 tracts leased in Cook Inlet, totaling over 911,000 acres of state land.”

There was only modest bidding in the 2015 state Cook Inlet sale, with just seven bids totaling about $750,000.

Oil and gas credits in Cook Inlet are being hotly debated in Juneau, with the latest bill introduced May 2 calling for closing the credits to new entrants after 2016 and phasing out others by 2018.

 

Usibelli to ship 75,000 tons

of coal to Japan soon

After halting exports last September, the Usibelli Coal Mine at Healy is currently fulfilling an order for 75,000 tons for shipment to Japan.

Railroad cars loaded with coal are now making the trek to Seward to be loaded once the ship arrives in mid-summer between June and July, according to a Usibelli Vice President for External Affairs Lorili Simon. Simon said the current order is for the single shipload.

Japan was the only export customer for Usibelli in 2015, taking 150,000 tons.

Usibelli supplies coal to six power plants in Interior Alaska including three plants serving military installations, one serving the University of Alaska campus in Fairbanks, one that is owned by Usibelli subsidiary Aurora that services local Fairbanks community with power and steam heat, and Healy 1, a 25-megawatt coal power plant at Healy that is adjacent to Healy 2, the plant that was began producing power last year.

The Healy 2 owned by Golden Valley Electric Association will purchase about 200,000 tons per year.

The mine produced about 1.2 million tons in 2015. In 2011, the mine exported a record 1.1 million tons.

 

Alaska Air Group adds

to record profits

Alaska Air Group Inc. didn’t miss a beat in the first quarter, posting yet another record profit of $184 million while hashing out a deal to buy Virgin America airlines.

The Seattle-based parent company to Alaska Airlines and regional carrier Horizon Air grew its net income by more than 20 percent over the then-record $149 million profit it posted in the first quarter of 2015.

The first quarter is traditionally the slowest quarter in the airline industry, but Air Group’s $184 million profit nearly matches the $186 million it netted in the last quarter of 2015, also a record. Its $842 million net income for 2015 was a full-year record as well.

Overall, Alaska Air Group has defied the odds in a hyper-competitive and volatile business and posted six consecutive years of record profitability. Each quarter within those years has also been a record with very few exceptions.

On April 4, the company announced a $4 billion deal to purchase San Francisco-based Virgin America, which Air Group executives hope will make Alaska Airlines the dominant carrier on the West Coast.

Alaska Air Group stock closed April 27 trading at $74.35 per share.

— Morris News Service – Alaska

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