The first oil and natural gas lease sale in the Gulf of Mexico (GOM) since the Macondo well blowout will be held in New Orleans Dec. 14, the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEM) announced Friday.

The proposed Western Gulf of Mexico Lease Sale 218 will include all available unleased areas in the Western Gulf Planning Area offshore Texas — about 3,900 blocks covering approximately 20.6 million acres located from nine to about 250 miles offshore, in water depths ranging from 16 to more than 10,975 feet. The lease sale could result in the production of 222-423 million bbl of oil and 1.49-2.65 Tcf of natural gas, according to BOEM.

In an effort to “provide incentives for diligent development and to ensure receipt of fair market value for the lease rights sold,” BOEM also proposed to increase the minimum bid amount for blocks in water depths of 1,312 feet and greater to $100/acre from the previous minimum of $37.50/acre. An analysis of the last 15 years of GOM lease sales found that received high bids of less than $100/acre “have experienced virtually no exploration and development activities,” BOEM said.

“In light of this analysis, BOEM has concluded that the increase will have little to no adverse impact on the timing or magnitude of production from tracts offered in this sale. Raising the minimum bid will discourage companies from purchasing leases they are unlikely to explore in the near term,” BOEM said.

The proposed increased should help ensure that areas with the greatest resource potential are developed, and decrease the amount of leased acreage that goes unexplored, according to BOEM Director Michael Bromwich. “The change in terms will better ensure that the nation’s resources are being developed in a timely manner,” Bromwich said.

The minimum bid amount for leases in shallower water depths will remain at $25 per acre.

Lease Sale 218 is the last remaining Western Gulf Planning Area sale scheduled in the 2007-2012 Outer Continental Shelf Oil and Natural Gas Leasing Program. The lease sale was delayed by the Macondo well blowout in the Gulf of Mexico last year, which sank the Deepwater Horizon drilling rig (see Daily GPI, April 26, 2010). The western leasing area of the GOM generally is viewed as less attractive commercially to oil and gas operators than tracts in the central GOM, where the Macondo well was being drilled.

A proposed notice of sale information package is available on the BOEM website, from the Gulf of Mexico Region’s public information unit at 1201 Elmwood Park Blvd., New Orleans, LA 70123, or at 800-200-GULF. A final notice of sale will be published at least 30 days before the sale, BOEM said.

A sale of central GOM leases remains on track to be completed by mid-2012, when the current five-year leasing plan is scheduled to expire, a BOEM spokesperson told NGI Friday.

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