Following the sizeable Western Gulf of Mexico Lease Sale 180 held by the Interior Department’s Minerals Management Service (MMS) last week, many exploration and production companies were quick to report their deals. Kerr-McGee Oil & Gas Corp. and partners reported that they were the high bidders on 42 blocks, Pioneer Natural Resources Co. was the apparent high bidder on 21 blocks and Devon Energy Corp. reported that it was the high bidder on nine blocks.

During the sale on Aug. 22 (see Daily GPI, Aug. 23), 386 bids totaling $190 million were received. The high bids added up to $165.6 million. The agency said that fifty participating companies bid on 320 tracts in the Western Gulf of Mexico, offshore Texas, and in deeper waters offshore Louisiana. MMS officials labeled the sale as “clearly a success.”

Kerr-McGee — which had the high bid on the most blocks — said its net total exposure for all high bids was approximately $32 million, while Pioneer’s net investment on the apparent high bids would be approximately $6.5 million and Devon’s total exposure for its high bids was approximately $1.8 million. All bids are still subject to approval by the U. S. Department of Interior’s MMS.

“These new leases complement our existing prospect inventory in the deepwater gulf and fit our strategy to build core operating areas within high- potential trends,” said Luke R. Corbett, Kerr-McGee CEO. “We will operate 90% of these high-bid blocks with an average working interest of about 80%, allowing us to continue to enhance our successful exploration and development program.”

Kerr-McGee, which is the largest independent leaseholder in the Gulf, said with the new blocks it will hold interests in 377 deepwater blocks in the Gulf of Mexico and will operate more than 75% of these leases with an average working interest of 51%. The company added that the 42 new blocks would increase the company’s total leaseholdings in the Gulf by 236,655 gross acres to nearly 3 million gross acres.

Pioneer said that nine of its high bids are on blocks on the Gulf of Mexico shelf covering approximately 51,840 acres focused on the company’s targeted Deep Miocene gas play offshore Texas. Pioneer said it would have a 100% working interest and act as operator on these blocks. The remaining apparent high bids were submitted on twelve Deepwater blocks covering approximately 69,120 gross acres concentrated near the company’s recently announced Falcon discovery. Dallas-based Pioneer has a 50% working interest and would act as operator on three blocks.

Oklahoma City, OK-based Devon reported that five of the nine blocks it was awarded are on the shallow shelf, with the remaining four located in deepwater. Devon said it participated in the bids with partners. The company will have a 50% working interest in each block.

Assuming approval of its bids, Devon will hold 367 lease blocks in federal waters of the Gulf of Mexico. Devon’s portfolio of lease blocks include 257 on the shelf and 110 in deepwater. Of the 367 total blocks, 166 are producing blocks and 201 are exploratory blocks currently. The company said it currently operates 101 platforms in the Gulf of Mexico.

Following Kerr McGee, Spinnaker Exploration Co. LLC. came in second with high bids on 32 blocks ($17.4 million), followed by Petrobras America Inc. with 30 ($16.9 million), Exxon Mobil Corp. 29 ($7.8 million), Anadarko Petroleum Corp. 26 ($5 million), Amerada Hess Corp. 25 ($13.5 million), Pioneer in seventh, Ocean Energy Inc. 17 ($6.3 million), Union Oil Co. of California 17 ($4 million) and Shell Offshore Inc. rounding off the top ten with 14 blocks at $11 million.

The MMS’ results from the sale showed that blocks in the Garden Banks and High Island areas received the highest bids. Six of Kerr-Mcgee’s high bids ranked in the top ten highest bids for the sale, with five of them for Garden Banks’ blocks.

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