The U.S. Department of the Interior’s Minerals ManagementService (MMS) received more than $741.85 million in 486 bids duringthe Western Gulf of Mexico Lease Sale No. 171. Winning or high bidstotaled $553.4 million for 402 blocks. The results are down sharplyfrom last year’s western Gulf sale, and depressed oil prices arelikely to blame for dampening enthusiasm for this year’s sale.

Last year’s sale broke records. A total of 1,224 bids were madeon 804 blocks. This time around, a total of 3,778 blocks wereoffered, and each block received an average of 1.21 bids. Therewere 63 companies participating. The highest bid was $37.41 millionfrom a group formed by Unocal’s Spirit Energy 76 (70%), BritishBorneo Petroleum (15%), and Seagull Energy (15%) for AlaminosCanyon Block 947. Spirit Energy had the second highest bid on itsown, $31.02 million, and Vastar Resources had the third highest bidof $28.30 million.

Overall, Spirit Energy was the apparent high bidder on its ownor with partners for interests in 62 deep-water and 15 ContinentalShelf blocks. “This lease sale provides a solid underpinning forSpirit Energy’s growth plans, and we are very pleased with ourresults,” said Jack W. Schanck, Spirit Energy president. “Ourperformance in this lease sale represents a solid investment in thefoundation we are laying for our future reserve and productiongrowth.”

Vastar said it was the apparent high bidder, alone or withpartners, on 32 lease blocks. If all the blocks are awarded, thecompany’s deep-water portfolio will grow by 24 blocks to 124, andits shelf portfolio, already more than 300 blocks, will gain eightblocks.

In the sale, 323 blocks in depths of 200 meters or greaterreceived bids. The largest totals for all bids and for high bidswere for blocks in depths of 800 meters or more. High bids totaled$499.42 million for blocks in depths of 800 meters or more. Therewas $17.75 million in high bids in depths from 400 to 800 meters,$4.89 million in high bids in depths of 200 to 400 meters, and$31.38 million in depths less than 200 meters. This is the thirdsale in the western Gulf and the sixth sale overall in whichbidders on blocks in depths greater than 200 meters are eligiblefor deep-water royalty relief.

Joe Fisher, Houston

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