Western Gulf of Mexico Sale 218 Nets $325 Million in High Bids

BOEM Completes Tract Evaluation and Awards Leases

The Bureau of Ocean Energy Management completed its required evaluation to ensure that the public receives fair market value for tracts leased as part of Western Gulf of Mexico Oil and Gas Lease Sale 218, which was held on December 14, 2011. After extensive economic analysis, BOEM has awarded 181 leases on tracts covering 1,036,205 acres to the successful high bidders who participated in the sale, which made 3,913 unleased blocks covering more than 21 million acres available offshore Texas. The accepted high bids are valued at $324,971,001.

During the sale, 20 companies submitted 241 bids totaling $712,725,998 on 191 tracts. A total of $337,688,341 was received in high bids. BOEM rejected nine high bids, totaling $12,596,540, after determining that the value of those bids was insufficient to provide the public with fair market value for the tracts.

In addition, a successful high bidder forfeited a lease and the 1/5th bonus that was submitted with the bid. As a result, BOEM collected $30,200 of the $151,000 bid on the forfeited tract. BOEM holds the 1/5th bonus paid in advance if full payment is not made or if a company declines the lease after BOEM officially accepts a high bid.

BOEM will reoffer these tracts as part of the next Western Gulf of Mexico sale, which is currently scheduled for late 2012.

The highest bid accepted was $103,200,000 by ConocoPhillips Company for Keathley Canyon Block 95. This represents the second largest bid for a tract since area-wide leasing began in 1984. The tract is at depths of 2,625 to 5,249 feet (800-1600 meters) and received seven bids. The second highest accepted bids were two bids by Maersk Oil Gulf of Mexico Two LLC for $8,640,816 on Garden Banks 537 and Garden Banks 582 at depths of 1,312 to 2,625 feet (400-800 meters).

Funds from the accepted high bids will be distributed to the general fund of the U. S. Treasury, shared with the affected states and set aside for special uses that benefit all 50 states.

Sale statistics for Western Sale 218 are available at: http://www.boem.gov/Oil-and-Gas-Energy-Program/Leasing/Regional-Leasing/Gulf-of-Mexico-Region/Lease-Sales/218/Western-Planning-Area-Lease-Sale-218-Information.aspx.

Photo (thumb): Secretary Salazar announces the results at the Western Gulf of Mexico Lease Sale 218 in New Orleans, LA in December 2011. (http://www.doi.gov)

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Source: The Bureau of Ocean Energy Management