Deep water biggest draw in gulf lease sale

Aug. 31, 1998
Top 10 tracts [123,606 bytes] Oil companies have again bid heavily for deepwater tracts in the latest Gulf of Mexico lease sale. In Lease Sale 171 in the western Gulf of Mexico, 63 operators submitted 486 bids on 3,778 blocks. The bids exposed a total of $741,855,047. Apparent high bids totaled $553,435,908 for 402 blocks. About 69% of the bids in Sale 171 were for blocks in more than 800 m of water. These blocks received 278 high bids totaling $499,420,207. Of the blocks receiving bids, 20%
Oil companies have again bid heavily for deepwater tracts in the latest Gulf of Mexico lease sale.

In Lease Sale 171 in the western Gulf of Mexico, 63 operators submitted 486 bids on 3,778 blocks. The bids exposed a total of $741,855,047. Apparent high bids totaled $553,435,908 for 402 blocks.

About 69% of the bids in Sale 171 were for blocks in more than 800 m of water. These blocks received 278 high bids totaling $499,420,207.

Of the blocks receiving bids, 20% were in water 0-200 m deep. These blocks drew 79 high bids totaling $31,378,124.

Three percent of the blocks were in water 200-400 m deep, and these received 14 high bids of $4,885,862. Eight percent were in water 400-800 m deep and received $17,751,715 in 31 high bids.

The top bid in the sale was $37,406,500 for Alaminos Canyon Block 947. It was submitted by Unocal Corp. on behalf of itself, British Borneo Petroleum Inc., and Seagull Energy E&P Inc. The block received four other bids.

The blocks receiving the most bids, at five apiece, were East Breaks 981, Garden Banks 562, Alaminos Canyon 903, and Alaminos Canyon 947.

Top 10 participants

Unocal Corp.'s U.S. upstream unit, Sprit Energy 76, was the most active participant in the sale. Its apparent high bids, submitted alone and with partners, totaled $184,825,150 on 77 tracts, 62 of which are in deep water.

The sale ostensibly increased the firm's deepwater portfolio by nearly 50%, to a total of 188 blocks.

Dave Johnson, Spirit's vice-president of exploration, said the company's goal is to find 400 million boe in the deepwater gulf by 2002.

Following Unocal was Texaco Exploration & Production Inc., which submitted apparent high bids totaling $48,750,959 on 61 tracts. And independent producer Vastar Resources Inc. was third most active, with high bids totaling $39,975,118 on 32 tracts.

Vastar's Bob Strode said, "We are very pleased to win what we believe is a top-tier deepwater prospect-this is the Entrada prospect on Garden Banks Blocks 782, 826, and 827 in approximately 4,800 ft of water. We have a recent-vintage 3D seismic survey that shows excellent direct hydrocarbon indicators, and we consider Entrada a candidate for drilling as early as 1999."

Also among the top 10 high bidders were: Burlington Resources Offshore Inc., Sonat Exploration GOM Inc., Amerada Hess Corp., Kerr-McGee Oil & Gas Corp., Shell Deepwater Development Inc., Exxon Asset Management Co., and Seagull Energy E&P Inc.

The block with the deepest water was Alaminos Canyon Block 965, which lies in 3,119 m. It received only one bid.

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