Burlington said there were several factors involved in its decision to drop its plan, including plenty of other opportunities in the world.
Company spokesman James Bartlett said development of an Alaska natural gas pipeline also appears to be at least seven to eight years away and the company would have continued carrying the cost of retaining the leases.
"Alaska is unlikely to become a core area for Burlington any time soon," he told Petroleum News.
The state learned of the change in plans after an annual rent payment of $367,002 was due on the leases July 1.
"When we didn't receive it, we put in a courtesy call. They said they weren't going to pay it," said Pat Galvin, petroleum land manager for the state Division of Oil and Gas.
In the 2001 lease sale, the company bid took 32 leases for nearly $1.9 million -- 20 percent of the money bid at the $9.8 million sale.
The state sold slightly more than 858,800 acres at the Foothills sale, at that time the most acreage ever sold in a single sale. The record was topped at the 2002 Foothills sale, when more than 1 million acres were sold.
The state's lease rents are progressive: $1 an acre the first year, $1.50 the second, $2 for the third year, $2.50 in the fourth year and $3 in the fifth and following years.
The Burlington leases covered more than 183,000 acres in the southern half of the Foothills sale area, between the Anaktuvuk and Itkillik rivers. Burlington paid $5.50 an acre for 13 of the leases and $14.44 an acre for the other 19.
Since this was the first lease sale in the area the state had to do title work on all of the acreage receiving bids after the sale and didn't issue leases until July 1, 2002. The leases had a 10-year term running from the issue date.
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