Thursday, March 20, 2008

Gulf of Mexico lease sales reap record breaking results

The U.S. Minerals Management Service reported record-breaking results for Lease Sale 206, which offered blocks in the central Gulf of Mexico, and Lease Sale 224, which offered blocks in the eastern Gulf of Mexico.

Both sales were conducted at the Louisiana Superdome in New Orleans. MMS Director Randall Luthi said, "Today's sales emphasize the Gulf's strategic value for America's energy security and the significant economic benefits of environmentally safe oil and gas production for the nation and the Gulf of Mexico oil and gas producing states." The sum of high bids in Lease Sale 206 totaled over US$3.7 billion, setting a new record, while the sum of all bids was over US$5 billion. Operators left around US$2 billion on the table, an indication of how heavily invested many of these companies are or want to be in the U.S. Gulf of Mexico. Of the 5,569 blocks offered in the sale, 615 received bids. Eighty-five companies participated in the sale, making 1,057 bids in total. The average number of bids on a block was 1.72. Of the bids, companies bid on 185 blocks in shallow waters of less than 200 meters (656 ft). Lease Sale 224 offered 118 blocks, with 36 receiving bids. The sum of high bids in the sale was US$64 million, while the sum of all bids was over US$72 million. Fifty-eight bids were submitted from six companies, with an average of 1.61 bids per block. The highest bid per acre was made by BHP Billiton Petroleum, which bid on US$22,277.78 per acre on De Soto Canyon Block 818. The deepest blocks receiving bids were Lloyd Ridge Blocks 332 and 333. These are located in water depths of 3,091 meters (10,141 ft). BHP Billiton submitted 27 of the high bids in the sale, totaling US$47,858,420.
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