By OGJ editors
HOUSTON, Nov. 28 -- The US Minerals Management Service has issued a proposed notice for Central Gulf of Mexico Outer Continental Shelf Lease Sale 198 scheduled Mar. 15, 2006.
Sale 198 offers 4,000 blocks covering 21 million acres 3-210 miles off Louisiana, Mississippi, and Alabama in 4-3,400 m of water. MMS estimates the proposed lease sale could result in the production of 276-654 million bbl of oil and 1.59-3.3 tcf of natural gas.
The proposed sale includes provisions for deepwater royalty relief lease terms specified in the Energy Policy Act of 2005 and initially implemented with the August Western Gulf of Mexico Sale 196.
It also includes shallow-water, deep-gas royalty relief for leases in less than 400 m of water. Previous sale relief was less than 200 m. In addition, this sale will provide an increase in the royalty suspension volume to 35 bcf from 25 bcf for successful wells drilled 20,000 ft TVD subsurface or deeper.
This will be the first central gulf sale with higher rental rates that were implemented in the last western gulf sale (OGJ, Online, Mar. 29, 2005). The rates are $6.25/acre for blocks in less than 200 m and $9.50/acre for blocks in 200 m or deeper water.
A new stipulation limits use of the seabed and water column in Mississippi Canyon Block 118 because of a federally funded University of Mississippi study of gas hydrates.
