GOM Lease Sale 205 attracts $2.9 billion in high bids

More than $2.9 billion in apparent high bids were offered for 723 tracts in the central Gulf of Mexico Lease Sale 205, the US DOI's MMS agencey reported.

By OGJ editors
HOUSTON, Oct. 5 -- More than $2.9 billion in apparent high bids—the second-highest total in US leasing history—were offered for 723 tracts in the central Gulf of Mexico Lease Sale 205, the US Department of the Interior's Minerals Management Service reported.

The agency's previous sale in August, Lease Sale 204 covering the western Gulf of Mexico, attracted high bids of $290 million (OGJ Online, Aug. 27, 2007).

In the latest sale, the first under the newly demarcated central gulf area, MMS received 1,428 bids totaling $5.246 billion from the 84 companies participating.

This sale offered 5,359 tracts comprising about 28.7 million acres in federal areas off Louisiana, Mississippi, and Alabama. Developing these oil and gas rights could result in the production of 776 million-1.3 billion bbl of oil and 3.2-5.2 tcf of natural gas, according to Interior officials.

About 40% of the tracts that received bids are in ultradeep water of more than 1,600 m. MMS said it expected the ultradeep and deepwater areas to receive a high level of interest. It said, "The progress being made both in terms of discoveries and advanced technology provide incentive for operators to explore these frontier areas."

The deepest tract to receive a bid is Amery Terrace Block 206 in 3,398 m of water.

MMS said BP Exploration & Production Inc. submitted the most high bids, 83 for a total of $107.1 million. Shell Offshore Inc. took second place with 69 high bids totaling $554.6 million. It also submitted the highest single bid of $90.5 million for Walker Ridge Block 7.

Rounding out the top five for high bids were Cobalt International Energy LP with 53 bids totaling $211.3 million, Chevron USA Inc. with 44 at $283.4 million, and Nexen Petroleum Offshore USA Inc. with 30 at $113.6 million.

The top five companies submitting the highest dollar amount of high bids are Shell with high bids totaling $554.6 million, Chevron with $283.4 million, Marathon Oil Co. with $221.7 million, Cobalt International with $211.3 million, and Murphy E&P Co. with $161.1 million.

Based on all the bids submitted, Shell offered the highest dollar amount of $650 million for its tracts. Chevron followed with a submission of $380 million.

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