BOEM: Firms bid $850 million in high bids in central gulf lease sale

The US Bureau of Ocean Energy Management reported that its central Gulf of Mexico Lease Sale 231 received 380 bids from 50 companies on 326 blocks, resulting in a total of $850 million in apparent high bids. The sale was held Mar. 19 in New Orleans.

The total amount bid was less than last year’s central gulf Lease Sale 227 at which BOEM received 407 bids on 320 of the 7,299 tracts offered, totaling $1.2 billion in apparent high bids (OGJ Online, Mar. 20, 2013).

The most sought-after acreage during this sale was in the deepwater and ultradeepwater, as blocks in 800-1,600 m of water received 57 bids and blocks in more than 1,600 m of water received 108 bids.

Cobalt International Energy LP and Total E&P USA Inc. tied among the top companies based on total number of high bids submitted, each submitting 44 apparent high bids. Cobalt’s sum of high bids was $25.85 million and Total E&P’s total of high bids was $17.23 million.

Based on the sum of high bids submitted, Freeport-McMoRan Oil & Gas LLC was at the top of the list with 16 total high bids totaling $321.44 million. Chevron USA Inc. placed second on that list, shelling out $103.32 million in 6 apparent high bids.

Atwater Valley Block 198, in 800-1,600 m of water, received the most bids—6—with the highest bid—$68.79 million—placed by Freeport-McMoRan. Overall, Freeport-McMoRan accounted for 6 of the 10 largest single apparent high bids.

Chevron USA submitted the second-highest single bid of $62.36 million for Mississippi Canyon Block 475. Shell Offshore Inc., meanwhile, also was among the top-ranked companies submitting single-highest bids, with a bid of $43.5 million for DeSoto Canyon Block 354.

Also among the top companies based on sum of high bids submitted were Murphy E&P Co. with 16 bids totaling $49.84 million and Shell Offshore with 4 apparent high bids totaling $45.54 million.

BP PLC unit BP Exploration & Production Inc. submitted a total of 24 apparent high bids totaling $41.63 million. BP this month reached an agreement effectively ending the bar against it on new federal contracts imposed in the wake of the 2010 Deepwater Horizon-Macondo deepwater well incident and crude oil spill (OGJ Online, Mar. 14, 2014).

Other active bidders included LLOG Bluewater Holdings LLC with 30 apparent high bids for a total $22.43 million and GulfSlope Energy Inc. with 22 apparent high bids for $7.84 million.

Lease Sale 231 was comprised of 7,511 unleased blocks over 39.6 million acres 3-230 miles offshore Louisiana, Mississippi, and Alabama. Only 4.34% of the tracts on offer received bids.

BOEM previously said the Lease Sale 231 could net 1 billion bbl of oil and 4 tcf of natural gas in production (OGJ Online, Oct. 25, 2013).

Meanwhile, eastern Lease Sale 225, which was held at the same time at its central counterpart, received no bids. It was comprised of 134 whole or partial unleased blocks over 465,200 acres 125 miles offshore Louisiana. BOEM previously said Lease Sale 225 could result in the production of 71 million bbl of oil and 162 bcf of natural gas (OGJ Online, Dec. 3, 2013).