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.
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.
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).
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).
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