High oil, gas prices drive OCS bidding

By OGJ editors

HOUSTON, Mar. 16 -- Near-record prices for oil and natural gas led to strong bidding Mar. 16 in two Outer Continental Shelf lease sales for tracts in the Eastern and Central Gulf of Mexico.

Results from Central Lease Sale 194 drew total bids and offerings that were in line with sales of past years, while Eastern Sale 197 "exceeded expectations," according to the US Department of the Interior's Minerals Management Service, which conducted the sales.

Eastern Sale 197
MMS received 12 bids for 12 tracts in the Eastern Gulf Outer Continental Shelf planning area, directly south of Alabama. Total bids from the sale reached nearly $7 million.

The 124 unleased blocks on offer cover more than 714,240 acres 100-196 miles offshore in 1,600-3,425 m of water. Estimates of undiscovered economically recoverable hydrocarbons from the lease are 65-85 million bbl of oil and 0.265-0.34 tcf of gas, MMS said.

The highest bid received on a block was $2 million, submitted by Helis Oil & Gas Co. LLC, Houston Energy LP, and Red Willow Offshore LLC for Lloyd Ridge Block 272. The second highest bid received was $1.6 million for De Soto Canyon Block 797 from Spinnaker Exploration Co. LLC and Dominion Exploration & Production Inc.

Petrobras America Inc. submitted the most high bids, with 4 high bids for a total of $1.6 million. Anadarko Petroleum Corp. submitted 3 high bids for a total of $0.8 million.

Central Sale 194
Central Lease Sale 194 drew high bids totaling nearly $354 million out of total offerings of $540.3 million by 80 companies. The sale drew 651 bids on 428 of the 4,063 tracts offered, comprising about 21.4 million acres.

Last year's Sale 190 for the Central Gulf drew high bids totaling almost $369 million and received the most bids in 6 years, MMS reported (OGJ Online, Mar. 17, 2004).

Dominion and Stone Energy Corp. submitted the highest single bid of the sale¿nearly $21.2 million for West Cameron Block 132 in less than 199 m of water. Dominion, which acted as that bid's submitter, tied with Focus Exploration LLC, each with 25 bids, for the top company based on total high bids submitted. Dominion submitted a total of $52.3 million in high bids, and Focus submitted a total of $10.2 million.

Other companies on that list included Murphy Exploration & Production Co., 23 bids totaling $28.1 million; LLOG Exploration Offshore Inc., 22 bids, $34.9 million; Energy Partners Ltd., 22 bids, $15.1 million; Chevron USA Inc., 22 bids, $8.1 million; Remington Oil & Gas Corp., 21 bids, $9.7 million; Spinnaker, 19 bids, $17 million; ExxonMobil Corp., 18 bids, $6.9 million; and Magnum Hunter Production Inc., 15 bids, $3.9 million.

The second highest bid of the day was $20.2 million for Mississippi Canyon Block 819 in more than 1,600 m of water, submitted by a group that included Murphy, Dominion, Pioneer Natural Resources USA Inc, and Spinnaker.

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