March 22, 2002
Central Gulf sale "a resounding success"
The Central Gulf of Mexico Lease Sale 182 attracted $363,210,467 in high bids from 77 companies. Minerals Management Service Director Johnnie Burton called the sale "a resounding success."
Lease Sale 182 offered 4,446 tracts comprising of approximately 23.4 million acres offshore Alabama, Louisiana, and Mississippi; the MMS received 697 bids on 506 tracts. The total of all bids was $442,441,036.
Bidding activity was very heavy in the shallow water with 288 tracts in less than 200 meters of water receiving 405 bids. This amounts to 57 percent of the sale.
"This was more activity than we had been expecting," said 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."
MMS first instituted a royalty incentive for deep gas in March 2001 but this was the first sale in the Central Gulf that contained the most recent revisions. Under the incentive, the first 20 Bcf of gas production from 15,000 feet or greater is royalty free.
The highest bid received on a block was $17,466,000 submitted by Phillips Petroleum Company for Green Canyon 199. Approximately 31 percent of the tracts receiving bids are in ultra-deep water (more than 800 meters). The deepest tract bid on was Atwater Valley, Block 347 in 2,665 meters of water.
The high bid on a block will go through an evaluation process to ensure the public receives fair market value before a lease is awarded.