NGI The Weekly Gas Market Report / NGI All News Access

Kerr-McGee Leads Gulf Lease Sale

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 last year."

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 activity."

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.

©Copyright 2000 Intelligence Press, Inc. All rights reserved. The preceding news report may not be republished or redistributed in whole or in part without prior written consent of Intelligence Press, Inc.

Copyright ©2018 Natural Gas Intelligence - All Rights Reserved.
ISSN © 2577-9877 | ISSN © 1532-1266
Comments powered by Disqus