Low gas prices and a dwindling number of available prospects suppressed interest in the latest central Gulf of Mexico lease sale.
In OCS Sale 131 Mar. 27, 123 companies offered 637 bids with bonuses totaling $320.5 million for 464 blocks. One year ago, in OCS Sale 123, 96 companies offered 840 bids with combined bonuses of $589.55 million for 538 blocks in the central gulf.
In Sale 131, apparent high bids totaled $259.9 million. High bids in March 1990 totaled $427.4 million.
High bidder in Sale 131 was Amerada Hess Corp., with 27 apparent winning offers totaling $32.653 million.
Last year, when operators were optimistic about higher gas prices and Sale 123 was perceived as one of the last good opportunities to acquire prime acreage in the central gulf, industry bidding activity was a different story.
BP Exploration Inc. led all bidders in Sale 123, exposing $78 million in 79 apparent high bids, including 60 for deepwater blocks.
Exxon Corp. was the most active bidder in Sale 131, with 63 apparent high bids of 69 offered. Twelve apparent winning offers were joint bids with Conoco Inc.
Exxon's net exposure was $23.3 million.
Viosca Knoll Block 694 received the highest bonus offer in Sale 131: $6,276,942 by Elf Exploration Inc.
Vermilion South Addition Block 395 received the highest bid in Sale 123, when Agip Petroleum Co. Inc. and Union Texas Petroleum Corp. offered a joint bid of $11,121,460. The block also received the second and fifth highest bids of Sale 123, $8.4 million and $6.2 million, respectively.
This year, Amerada Hess had three of the top five apparent winning offers: $6.189 million for Ewing Bank Block 991, $5.159 million for West Cameron Block 98, and $4.159 million for South Marsh Island South Addition 199. Amerada Hess also was apparent high bidder on South Marsh Island South Addition Block 198, with an offer of $2.141 million.
Marathon Oil Co. and Anadarko Petroleum Corp. rounded out the sale's top five offers with a joint bid of $4.229 million for Mississippi Canyon Block 617.
Shell Offshore Inc. exposed a net $19.85 million with 29 apparent high bids in 32 offers.
DEEPWATER TRACTS
Bidding for deepwater blocks continued to decrease, In Sale 123, 168 of the 538 blocks receiving bids were in water deeper than 600 ft, as were 192 blocks in 1989 and 293 blocks in 1988.
In Sale 131, Shell offered apparent high bids for 11 deepwater blocks.
In Sale 123, Shell was second leading bidder, exposing $40 million in 54 apparent high bids, 50 for deepwater acreage.
Shell and BP in 1990 bid more than $1 million for deepwater blocks in Atwater Valley, Green Canyon, and Mississippi Canyon.
Kerr-McGee Corp.'s net exposure in Sale 131 was $10.46 million in 12 apparent high bids, including two $3.228 million offers, for Ship Shoal South Addition Block 326 and South Timbalier Block 265.
ARCO, the surprise bidder in Sale 123, had 32 apparent high bids totaling $18,222,200 in Sale 131. The company offered bonuses totaling $22,289,200 for 48 blocks.
In Sale 123 ARCO was the third most active participant, exposing $39 million in 44 apparent high bids.
Copyright 1991 Oil & Gas Journal. All Rights Reserved.
