MMS rejects 13 high bids in Central Gulf of Mexico Lease Sale

The US Minerals Management Service Friday said it has rejected 13 high bids totaling $5,785,023 from the Mar. 28 Central Gulf of Mexico Lease Sale. It has accepted high bids for 534 other tracts totaling $499,683,478. MMS explained the rejected bids in Lease Sale 178, Part 1, were insufficient.


By the OGJ Online Staff

HOUSTON, June 22 -- The US Minerals Management Service Friday said it has rejected 13 high bids totaling $5,785,023 from the Mar. 28 Central Gulf of Mexico Lease Sale.

It has accepted high bids for 534 other tracts totaling $499,683,478 (OGJ Online, Mar. 28, 2001).

MMS explained the rejected bids in Lease Sale 178, Part 1, were insufficient.

MMS Regional Director Chris Oynes said, "We are pleased with the continued industry competition for Gulf of Mexico leases. Shallow water bidding -- water depths up to 655 ft -- was significant for this sale, with shallow water tracts receiving almost 62% of the total tracts bid on."

MMS said the shallow water activity could be attributed to relatively strong energy prices and the new MMS royalty relief provision for 20 bcf of deep gas production (greater than 15,000 ft) in shallow shelf waters.

It noted that 20% of the winning bids were in deep water ranging from 2,624 ft to 5,248 ft, with a lease term of 10 years, and almost 9% of the bids were in ultradeep water (5,249 ft or greater), also with 10-year terms.

The highest bid accepted on a tract was $26,115,000 by Exxon Asset Management Co. for Mississippi Canyon Block 912. Other winning bids of $18,378,000 by Kerr-McGee Oil & Gas Corp. for Green Canyon Block 680 and $18,315,000 by Exxon Asset Management for Mississippi Canyon Block 956 were the second and third highest bids in the sale. All three were in waters greater than 1,600 m (5,249 ft).

MMS said the sale indicates the continued strong showing of both major and independent oil and gas companies participating in the gulf.

It said the companies with the most high bids in the sale were Chevron USA Inc. with 53 tracts, Magnum Hunter Production Inc. 45, Samedan Oil Corp. 33, Remington Oil & Gas Corp. 33, Kerr-McGee Oil & Gas Corp. 32, and Spinnaker Exploration Co. LLC with 32.

More in Companies