Central Gulf of Mexico Lease Sale 182 snagged 697 bids on 506 tracts, the US Minerals Management Service said. Eugene Island 159, in less than 199 meters water depth, received the most bids, with seven. The highest bid was from Phillips to the tune of $17.5 million for Green Canyon 199.
The bids came from 69 companies.
MMS Spokesman Barney Congdon said the cash outlay at this central sale falls in the middle of the field of the last 10 central sales. The results are similar to those of Central Lease Sale 178, held March 28, 2001. Shallow water blocks grabbed the attention of most bidders in both years. Last year's Sale 178 received $505.5 million in high bids for 547 blocks of 4,390 tracts on offer.
The royalty incentive in shallow water drew the most bid interest, Congdon noted, with 57% of bids going to blocks in less than 200 meters water depth. Many newly available leases in that depth had been relinquished or expired, Congdon said. New leases in shallow waters are eligible for royalty relief of suspended royalties on the first 20 Bcf of gas produced from below 15,000 ft.
"This was more activity than we had been expecting," said newly-named MMS Director Johnnie Burton. "We are particularly pleased with the strong amount of bidding in the shallow water portion of the sale. Independent companies and majors both responded with bids in shallow water and were obviously encouraged by MMS's newest incentive of royalty relief for deep gas."
Congdon said the existing infrastructure in the shallow Gulf was appealing to new companies.
"You're seeing a lot of new companies," Congdon said. "Some are brand new companies that have never bid in the Gulf of Mexico before."
Of the shallow water blocks available for bid, 288 blocks in less than 199 meters water depth garnered bids, as did 19 blocks in 200 meters - 399 meters water depth and 42 blocks in 400 meters - 799 meters. In 800 meters - 1,599 meters water depth, 81 blocks got attention, and 76 blocks in beyond 1,600-ft water depth got bids. The deepest block to get a bid was Atwater Valley 347 in 2,665 meters water depth. There were 4,446 blocks available for bid.
The bids will be evaluated for fair market value before the bids are accepted. The review period is 90 days.
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