Apparent high bids totaling $171.4 million were offered for 351 offshore tracts at Lease Sale 192 for the western Gulf of Mexico, the US Minerals Management Service reported.
MMS officials received 421 bids totaling $197.4 million from 54 companies at the sale. Deep gas was of interest to the bidders. Of the 351 tracts receiving bids, 135 were in less than 200 m of water.
In the latest sale, MMS offered 3,907 blocks covering 21.2 million acres in the western gulf's Outer Continental Shelf planning area off Texas and Louisiana.
MMS Gulf of Mexico Regional Director Chris Oynes called the sale "the best western gulf sale in 6 years in terms of the number of bids received and the number of tracts bid on."
Sale statistics
Interest in deepwater and ultradeepwater tracts also was high. Of 193 deepwater tracts bid on, 37 were in 400-799 m of water, 101 in 800-1,599 m, and 55 in 1,600 m or greater.
Houston Exploration Co. submitted the highest single bid of $6.8 million for High Island Area, East Addition, South Extension, A-270, which lies in less than 199 m of water (Table 1).
The second highest single bid was submitted by Remington Oil & Gas Corp., Dallas, for Garden Banks Block 506. Remington bid nearly $4.9 million for the tract in 800-1,599 m of water. Kerr-McGee Oil & Gas Corp. held the third highest spot for its $4.2 million bid for East Breaks 424.
Based on the number of total apparent high bids submitted, Amerada Hess Corp. topped the list with 58 bids totaling $13.7 million. This was the third highest amount exposed by a single bidder (Table 2).
The company in second place in apparent high bids, BP Exploration & Production Inc., submitted 48 apparent high bids totaling $28 million, the most money exposed by a single bidder at the sale.
The apparent high bidder on seven deepwater lease blocks, Remington said all of its bids were submitted on a 100% working interest basis. The company's net financial exposure, if all blocks are awarded, totals $6.3 million. MMS evaluates all high bids to ensure that the public receives market value before a lease is awarded.
Remington Chairman and CEO James A. Watt said, "We recently expanded our 3D seismic data base to the deeper waters, and these leases were based on those new data. These blocks will be added to our extensive prospect inventory for drilling in 2005 and beyond."
High bid areas
Six of the 10 highest apparent high bids were for tracts in less than 200 m of water.
High Island A-270, for which Houston Exploration made the sale high bid, is one block north and two blocks east of where the company is developing High Island A-283 gas field.
The company drilled its sixth successful development well at the field and was drilling a seventh in August. Gross production from the field increased to 60 MMcfe/d from 5 MMcfe/d in the past 9 months.
Kerr-McGee's East Breaks 424 is five blocks north of the company's Boomvang/Nansen cluster of fields.
Private Houston Energy LP and Red Willow Offshore LLC, with the sale's fourth highest bid, snared High Island 87, near one of Houston Energy's larger concentrations of operations in the gulf.
Other bidders
Kerr-McGee bid high on 21 deepwater and three shelf leases, exposing $14 million, second highest amount for any bidder at the sale.
The company is operator of 80% of the high-bid blocks with an average 85% working interest. Some blocks are near the company's Gunnison, Nansen, and Boomvang hubs, while others contain exploration opportunities, the company said.
Unocal was apparent high bidder for 13 deepwater leases, exposing a net $3.24 million.
Devon Energy was apparent high bidder on 10 shallow water blocks and 16 deepwater blocks. Its net exposure is $12 million.
Award of all bids would bring Devon's federal gulf holding to 845 blocks, including 272 on the shelf and 573 in deep water. Of the 845 blocks, 222 are producing and 623 are exploratory. The company operates 450 platforms and caissons in the gulf.
