Kerr-McGee Leads Gulf Lease Sale
A federal offshore natural gas and oil lease sale --- the fifth
largest in 10 years --- was completed last month for blocks in the
western Gulf of Mexico, with $153.6 million in high bids.
Houston-based Kerr-McGee Oil & Gas Corp. and its partners were
the highest bidders on 22 blocks worth $16.3 million.
According to the U.S. Department of the Interior's Minerals
Management Service (MMS), which held the sale in New Orleans, 266
total bids were received totaling $167.3 million. The 60
participating companies bid on 226 tracts in the western Gulf,
offshore Texas and in deeper waters offshore Louisiana. Each tract
is about nine square miles.
"This was a moderately strong sale," said Chris Oynes, regional
director of the Gulf of Mexico Outer Continental Shelf. "The $153.6
million in high bids was also 62% higher than the comparable sale
MMS said that 97 tracts that got bids are in water depths of 200
meters or more. The highest bid was on a tract in Garden Banks
Block 624 submitted by Houston-based Kerr-McGee Oil & Gas corp.
and CXY Energy Offshore Inc. for $10.5 million.
"The sale was dominated by independent companies with Union Oil
of California, Kerr-McGee Amerada Hess and CXY Energy posting $63
million of the $153.6 million in high bids," Oynes said.
The highest bid on each tract will go through an evaluation
process to ensure a fair market value, he said, and are subject to
final approval by MMS.
"These blocks are located in proven, high-potential trends near
our recent discoveries in Nansen, Boomvang and Gunnison fields and
will add value to these core areas in the deepwater Gulf," said
Luke R. Corbett, Kerr-McGee CEO. "The award of these leases will
further enhance our ability to continually high grade our drilling
With final approval, Kerr-McGee will operate 16 of the 22
blocks, and hold a 50% working interest. With the new blocks, the
Houston company would hold interests in about 540 blocks in the
Gulf, with more than 300 in deep water.
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