Big Bidders: Central GOM Lease Sale 205



The Minerals Management Service (MMS) announced the results of the Central Gulf of Mexico Lease Sale 205 on October 3 in New Orleans, Louisiana. Of the 5,359 blocks offered, 723 of them received 1,428 bids. The average bid per block is the highest it’s ever been for this region at 1.98.

Development of the oil and gas in the 723 blocks awards is estimated by the MMS to result in 776 million to 1.3 billion barrels of oil and 3.2 to 5.2 trillion cubic feet of natural gas.

With 84 companies submitting bids, the total amount bid (both winning and losing bids) in the 205 Central Gulf of Mexico Lease Sale was $5,245,583,944. The highest bid for the sale lease was submitted by Shell at $90,488,445 for Walker Ridge, Block 7.

Money Talks
Shell Offshore Inc. will pay the most for winning bids at $554,563,223. The next four companies with the highest dollar amount for high bids were Chevron U.S.A. Inc. with more than $283 million, Marathon Oil Company with more than $221 million, Cobalt International Energy with more than $211 million and Murphy Exploration & Production Company with more than $161 million.

The companies that submitted the most winning bids were BP Exploration & Production Inc. with 83 bids, Shell Offshore Inc. with 69 bids, Cobalt International Energy with 53 bids, Chevron U.S.A. Inc. with 44 bids and Nexen Petroleum Offshore U.S.A. Inc. with 30 bids.

The list of companies that bid the most money, whether they won or lost, is topped by Shell with a total dollar amount of $649,999,879 for a total of 94 bids. Next comes Chevron U.S.A. Inc. with more than $379 million for 90 bids, Cobalt International Energy L.P. with more than $355 million for 130 bids, Marathon Oil Company with more than $345 million for 67 bids and Petrobras America Inc. with nearly $280 million for 55 bids.

Popular Blocks
The blocks receiving the most bids were Walker Ridge Blocks 7 and 51, with 13 bids each. Other blocks that received the highest number of bids were Walker Ridge 95 and Garden Banks 954 with 12 bids each; Green Canyon 996 with 11 bids; and Garden Banks 998, Green Canyon 817, Keathley Canyon 21 and Walker Ridge 139 all with 10 bids each.

The lease sale covered submerged land in U.S. waters offshore Louisiana, Mississippi and Alabama. The more than 5,000 blocks offered for lease totaled nearly 29 million acres. With 723 blocks actually receiving bids, just less than 4 million acres were acquired.

The 205 Lease Sale encompassed waters from 3 to approximately 224 miles offshore, and water depths ranged from 12 feet (4 meters) to 11,200 feet (3,400 meters).

Looking Back
In comparison to last year’s lease sale (Central Gulf of Mexico Lease Sale 198), there were substantially more blocks and acreage offered this time around. The 2006 lease sale only offered 4,040 blocks (in comparison to 5,359 blocks) and just more than 21 million acres (in comparison to nearly 29 million acres). In fact, there hasn’t been as many blocks or acreage available for lease since 1996, when the MMS offered 5,649 blocks and just over 30 million acres.

Last year, there were 707 bids received; that’s less than half of the bids received in this year’s lease sale (1,428 bids). There is only one other lease sale that has had more bids received; the Central Gulf of Mexico Lease Sale 166 in 1997 received 1,790 bids on 5,039 blocks (300 less than was available in the 205 lease sale).

RELATED COMPANIES
Company: BP plc more info
Operates 33 Offshore Rigs
 - BP Seeks Stake In Cairn Energy Senegal Assets (Nov 20)
 - Officials: BP, Eni Interested In Developing Iraq's Majnoon Oilfield (Nov 20)
 - Aker BP Buys Hess' Norway Unit For $2B (Oct 24)
Company: Nexen, Inc. more info
Operates 2 Offshore Rigs
 - Alberta Regulators Charge Nexen Energy Over 2015 Pipeline Spill (Jul 06)
 - Cenovus Drops Most Ever as $13.3 Billion Deal Ramps Up Risks (Mar 30)
 - UKCS Oil, Gas Extraction Drops 10% (Dec 08)
Company: Petrobras more info
Operates 35 Offshore Rigs
Manages 13 Offshore Rigs
 - Petrobras CEO Says To Discuss Refining Partnership With CNPC CEO (Nov 15)
 - Ex-SBM Executives Plead Guilty In US To Petrobras Bribe Charges (Nov 09)
 - CEO: Brazil's Petrobras Could Bid On More Blocks In Pre-Salt Auction (Oct 24)
Company: Shell more info
Operates 27 Offshore Rigs
 - Shell Looks Beyond Road Fuels to Secure Future of Refining (Nov 06)
 - API Panel Member: Voluntary Methane Program Forthcoming (Oct 06)
 - Eni Bets Big on Zohr Explorer Finding New Treasure (Oct 06)
Company: Marathon Oil Company more info
Operates 4 Offshore Rigs
 - Harvey's Wake Tempers Bullish Outlook for US Oil Output Growth (Sep 01)
 - RoyalGate to Drill New Well in Equatorial Guinea's Block Z (Sep 25)
 - ShaMaran Subsidiary to Contest TAQA Default Notice (Sep 21)
Company: Chevron Corporation more info
 - Buying Texas Oil at New Mexico Prices: Majors Go West for Shale (Nov 14)
 - Japan's JERA Imports First LNG Cargo Shipped From Chevron's Wheatstone Site (Nov 13)
 - Chevron Canada Okays Duvernay Development (Nov 07)
Company: Murphy Oil Corporation more info
 - Exxon Mobil Bets on Brazil, Buys 10 Oil Blocks in Auction (Sep 28)
 - Murphy Oil CEO: Now is the Time for Deepwater to Come Back (May 02)
 - Pilot Energy Inks Deal to Acquire Murphy's Stake in Permit WA-481-P Off WA (Jul 27)
Company: Cobalt International more info
 - US Oil Firm Cobalt Files For Arbitration Against Angola For $2B (May 12)
 - US Firm Cobalt Threatens Arbitration Over Angolan Oil Assets (Apr 03)
 - Cobalt Encouraged by North Platte Appraisal Results (Jan 04)
For More Information on the Offshore Rig Fleet:
RigLogix can provide the information that you need about the offshore rig fleet, whether you need utilization and industry trends or detailed reports on future rig contracts. Subscribing to RigLogix will allow you to access dozens of prebuilt reports and build your own custom reports using hundreds of available data columns. For more information about a RigLogix subscription, visit www.riglogix.com.