Region-wide gulf lease sale yields $178.1 million in high bids
The region-wide Gulf of Mexico lease sale, held Aug. 15 in New Orleans by the US Bureau of Ocean Energy Management, generated $178.1 million in apparent high bids for 144 tracts. There were a total of 14,622 tracts offered in the gulf's federal waters.
A total of 29 companies submitted bids totaling $202.7 million in Lease Sale 251, which covered more than 78 million acres in areas 3-231 miles offshore in the gulf's western, central, and eastern planning areas in 3-3,400 m of water.
ExxonMobil Corp., BP Exploration & Production Inc., and Hess Corp. filled the top three spots of companies with the number of apparent high bids submitted. ExxonMobil submitted 25 apparent high bids totaling $40,555,000; BP, 19 totaling $12,571,230; and Hess, 16 totaling $36,178,321.
The deepest block receiving a bid was Lloyd Ridge Block 239 in 3,024 m of water. The tract receiving the greatest number of bids was Green Canyon Block 437 with 4 bids. The highest bid on a block, made by Hess Corp., was more than $25.9 million for Mississippi Canyon 338 in more than 1,600 m of water.
Deepwater was the main draw at the sale, with a rounded $111.6 million in apparent high bids received for 55 tracts offered in greater than 1,600 m of water. Over $48.5 million in apparent high bids was received for 43 tracts in 800-1,600 m of water.
Chevron USA Inc., with a bid of about $11.1 million, was the company submitting the second single-highest bid in its try for Mississippi Canyon Block 743 in more than 1,600 m of water.
This latest lease sale is the third offshore sale under the Outer Continental Shelf Oil & Gas Leasing Program for 2017-22. Under the program, 10 region-wide lease sales are scheduled for the gulf.
The Gulf of Mexico OCS, covering about 160 million acres, contains about 48 billion bbl of undiscovered technically recoverable oil and 141 tcf of undiscovered technically recoverable gas, according to BOEM.
“The Gulf of Mexico is a long-established oil and gas province and many of the blocks offered at today’s sale have been offered many times before,” said Kate MacGregor, US Department of the Interior principal deputy assistant secretary. “Today’s results demonstrate a steady interest as serious innovation and engineering continues to unlock new energy resources deep below the seabed.”
Ahead of the sale, BOEM noted that fiscal terms of the sale take into account market conditions and ensure taxpayers receive a fair return for use of the OCS. Terms include a 12.5% royalty rate for leases in water depths less than 200 m, and 18.75% for all other leases issued in the sale. The rates recognize current hydrocarbon price conditions and the marginal nature of remaining Gulf of Mexico shallow water resources, BOEM said.
