A federal offshore natural gas and oil lease sale — the fifthlargest in 10 years — was completed last month for blocks in thewestern Gulf of Mexico, with $153.6 million in high bids.Houston-based Kerr-McGee Oil & Gas Corp. and its partners werethe highest bidders on 22 blocks worth $16.3 million.

According to the U.S. Department of the Interior’s MineralsManagement Service (MMS), which held the sale in New Orleans, 266total bids were received totaling $167.3 million. The 60participating companies bid on 226 tracts in the western Gulf,offshore Texas and in deeper waters offshore Louisiana. Each tractis about nine square miles.

“This was a moderately strong sale,” said Chris Oynes, regionaldirector of the Gulf of Mexico Outer Continental Shelf. “The $153.6million in high bids was also 62% higher than the comparable salelast year.”

MMS said that 97 tracts that got bids are in water depths of 200meters or more. The highest bid was on a tract in Garden BanksBlock 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 Oilof California, Kerr-McGee Amerada Hess and CXY Energy posting $63million of the $153.6 million in high bids,” Oynes said.

The highest bid on each tract will go through an evaluationprocess to ensure a fair market value, he said, and are subject tofinal approval by MMS.

“These blocks are located in proven, high-potential trends nearour recent discoveries in Nansen, Boomvang and Gunnison fields andwill add value to these core areas in the deepwater Gulf,” saidLuke R. Corbett, Kerr-McGee CEO. “The award of these leases willfurther enhance our ability to continually high grade our drillingactivity.”

With final approval, Kerr-McGee will operate 16 of the 22blocks, and hold a 50% working interest. With the new blocks, theHouston company would hold interests in about 540 blocks in theGulf, with more than 300 in deep water.

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