Central gulf OCS Sale 166 another sizzler

March 10, 1997

A Central Gulf of Mexico lease sale last week in New Orleans drew strong industry interest and high bids totaling $824,055,489. Oil firms exposed $1,241,942,374 at the sale, No. 166, which offered 5,059 tracts totaling 27.2 million acres off Alabama, Louisiana, and Mississippi. The Minerals Management Service said operators submitted a record 1,790 bids on a record 1,032 tracts. Kerr-McGee Corp. and Agip Petroleum Co. Inc. submitted the highest bid for a tract, $8,052,000 for Mississippi Canyon

A Central Gulf of Mexico lease sale last week in New Orleans drew strong industry interest and high bids totaling $824,055,489.

Oil firms exposed $1,241,942,374 at the sale, No. 166, which offered 5,059 tracts totaling 27.2 million acres off Alabama, Louisiana, and Mississippi.

The Minerals Management Service said operators submitted a record 1,790 bids on a record 1,032 tracts.

Kerr-McGee Corp. and Agip Petroleum Co. Inc. submitted the highest bid for a tract, $8,052,000 for Mississippi Canyon Block 286. That block drew six bids in all.

MMS officials said more than half of the tracts receiving bids were in more than 200 m of water. MMS said operators bid on 412 tracts in waters to 200 m, 33 tracts in 200-400 m, 52 tracts in 400-800 m, and 535 tracts in waters of more than 800 m.

MMS Director Cynthia Quarterman noted a Central Gulf of Mexico sale a year ago garnered $520.9 million in high bids as 78 companies submitted 1,381 bids on 924 tracts (OGJ, May 6, 1996, p. 40).

"Clearly, given the results of today's sale, the industry continues to display an unprecedented level of confidence in the energy potential of the central gulf, and we couldn't be more delighted."

Observers said passage of a federal deepwater royalty relief bill helped fuel industry interest in the sale a year ago, and that also was a factor this year.

MMS said 103 companies participated in the sale. Shell Oil Co. dominated with 191 bids, followed by Unocal Corp. 129, Zilkha Energy Co. 121, Chevron Corp. 117, Vastar Resources Co. 81, Conoco Inc. and Texaco Inc. with 77 each, and Louisiana Land & Exploration Co., BHP Petroleum Pty. Ltd., and Norway's Den norske stats oljeselskap AS with 67 each.

Robert Stewart, National Ocean Industries Association president, said, "It was a very active sale for independent producers in shallow waters, but they also showed increased interest in deepwater tracts.

"Interestingly, even if you omitted the deepwater tracts, this would still have been a very big sale."