DENVER -- More than 76 bcf of natural gas was sold to six companies as part of a Royalty in Kind (RIK) Gulf of Mexico gas sale conducted this month by the Department of the Interior's Minerals Management Service (MMS).
Approximately 76 bcf of natural gas was sold under five- or 12-month contracts with delivery scheduled to begin Nov. 1, 2008.
The gas sold in the RIK sale involves an aggregation of royalties taken "in kind" in the form of product, rather than "in value" or cash payments, from gas production in the GoM. MMS then sells the gas competitively on the open marketplace with the goals of increasing revenues, improving government efficiencies, and shortening the compliance cycle.
Winning bidders are ConocoPhillips Co., Shell Energy North America, US LP, United Energy Trading LLC, J.P. Morgan Chase, Williams Gas Marketing Co., and National Energy and Trade, LP.
The approximately 76 bcf of gas sold during the sale is based on average volumes of gas produced prior to Hurricane Ike. Actual volumes sold may vary as gas that was shut-in because of the hurricane is restored to production and delivered to market centers.