Gulf lease sales attract $3.7 billion in high bids

Two federal sales of offshore oil and natural gas leases in the eastern and central planning areas of the Gulf of Mexico have attracted a total of more than $3.7 billion in apparent high bids. Central Gulf Lease Sale 206 and Eastern Gulf Lease Sale 224, both conducted by the US Department of the Interior’s Minerals Management Service, were held back-to-back Mar. 19 in New Orleans.

Central Lease Sale 206, held first, attracted $3,677,688,245 in apparent high bids, setting a record in US leasing history for high bids since area-wide leasing began in 1983, MMS reported. In Sale 206 the agency received 1,057 bids from 85 companies on 615 tracts.

For Eastern Lease Sale 224, held second, MMS received 58 bids from 6 companies on 36 tracts resulting in $64,713,213 in apparent high bids.

“Today’s lease sales mark an important milestone in sharing substantially increased revenue from offshore oil and gas development with states willing to support it,” said Interior Sec. Dirk Kempthorne. “Beginning with Lease Sale 224, Louisiana, Mississippi, Alabama, and Texas will receive a greater share in all these revenues, including bids, rental payments, and royalties,” he said.

Sale details

Central Sale 206 offered 5,569 tracts comprising about 29.8 million acres in federal areas off Louisiana, Mississippi, and Alabama. The acreage lies 3-230 miles offshore in 3-3,400 m of water.

About 34% of the tracts receiving bids in this sale are in ultradeep water, more than 1,600 m. The deepest tract to receive a bid is Lloyd Ridge Block 286, which lies in 3,076 m of water. The highest bid received on a block was $105,600,789 submitted by Anadarko Exploration & Production Co. LP, Murphy Exploration & Production Co.-USA, and Samson Offshore Co. for Green Canyon Block 432.

Eastern Sale 224 encompasses 118 whole or partial unleased blocks covering 546,971 acres in the gulf’s eastern planning area. The acreage is 125 miles and more offshore—south of the Florida panhandle and west of the Military Mission Line—in 810-3,113 m of water.

The sale is the first in which the revenue-sharing provisions of the Gulf of Mexico Energy Security Act of 2006 (GMESA 2006) will start immediately. The states of Alabama, Mississippi, Louisiana, and Texas will share in 37.5% of the high bids on whole and partial blocks in the eastern planning area. These four gulf producing states also will share in 37.5% of all future revenues generated from the acreage leased today in the gulf’s eastern planning area.