Lackluster lease sale nets $22.7 million for western Gulf oil parcels

Today’s lease sale for the Western Gulf of Mexico in New Orleans drew only $22.7 million in high bids for tracts on the U.S. Outer Continental Shelf off the coast of Texas. It was the smallest such sale of parcels in the Western Gulf since the federal government began regional sales in 1983.

Five offshore energy companies submitted 33 bids on 33 tracts, covering approximately 190,080 acres in the western Gulf of Mexico, to the Bureau of Ocean Energy Management (BOEM). The sale offered 4,083 unleased blocks, covering about 21.9 million acres, located from nine to 250 nautical miles offshore in water depths ranging from 16 feet to more than 10,975 feet.

At a similar sale last August, 14 companies bid on 81 tracts spread over more than 430,000 acres. That sale drew nearly $110 million in high bids.

“While this sale reflects today’s market conditions and industry’s current development strategy, it underscores a steady, continued interest in developing deep water federal offshore oil and gas resources,” said BOEM Director Abigail Ross Hopper.

In a statement, the National Ocean Industries Association (NOIA), which represents offshore energy interests, called the results “disappointing” but noted that they “accurately reflect the current environment of low commodity prices and increasing regulatory changes and uncertainty.”

The top bidder at today’s sale was BHP Billiton, which had 26 high bids totaling $16.3 million. The highest individual bid was from Ecopetrol America Inc., which pledged $2.8 million for a single tract in the East Breaks area.

 

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Ashley Herriman

Ashley Herriman is WorkBoat's online editor.

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  1. Pingback: Record low take for Western GOM lease sale | Renewable Energy Contracts

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