Offshore staff

NEW ORLEANS -- The MMS proposes that lease sales 206 and 224 for the Central Gulf of Mexico and Eastern Gulf of Mexico planning areas be held consecutively on March 19, 2008.

Proposed Lease Sale 206 includes 5,000 unleased blocks covering more than 28.5 million acres in the central planning area offshore Louisiana, Mississippi, and Alabama. The acreage is 3 to 230 mi (5 to 370 km) offshore in water depths of 10 to 11,200 ft (3 to 3,400 m).

MMS estimates that this sale contains 0.877 to 1.457 Bbbl of oil and 3.653 to 5.892 tcf of natural gas.

Proposed Lease Sale 224 includes 118 whole or partial unleased blocks covering 547,230 acres in the eastern GoM planning area. The acreage is 125 mi (201 km) offshore, south of Florida, and west of the Military Mission Line in water depths from 2,657 to 10,213 ft (810 to 3,113 m).

"This is the first sale in the eastern planning area to offer these blocks since 1988," says Stephen Allred, assistant secretary for Land and Minerals Management. "It is also the first sale where sharing provisions of the Energy Security Act will start immediately. The states of Alabama, Mississippi, Louisiana, and Texas will share in revenue from all leases resulting from this sale."

MMS estimates that this sale contains from 100 to 140 MMbbl of oil and 0.16 to 0.34 tcf of natural gas. It will be the only sale in the eastern Gulf to be held during the current Five Year Program, according to the MMS.

Sales 206 and 224 include an increase in the royalty rate to 18.75% and will include rental rates of $6.25/acre for tracts in waters 200 m (656 ft) or less and $9.50/acre for tracts in deeper waters. The price threshold for deepwater royalty relief in Sale 206 is $35.75/bbl of oil and $4.47/Mcf of gas, both based on 2006 dollars.

10/31/2007