The Walker Ridge in the Lower Tertiary of the deepwater Gulf of Mexico (GOM), which may — or may not — hold vast amounts of oil and natural gas reserves, captured the highest bid for a block in the Minerals Management Service’s (MMS) Central GOM sale on Wednesday.

With a bid of $90.45 million, Shell Offshore Inc. outbid 12 others for a chance to explore a block on Walker Ridge. Besides being the priciest, the Lower Teritary block also received the highest number of bids, according to the MMS.

Last year Chevron Corp., Devon Energy Corp. and Statoil ASA completed the deepest extended drill stem test in history on the Walker Ridge, with the successful production test on the Jack No. 2 well (see Daily GPI, Sept. 6, 2006). Wood Mackenzie predicted in July that the GOM deepwater would likely attract record bids in Wednesday’s lease sale (see Daily GPI, July 27).

In all, the MMS reported that 84 companies participated in Wednesday’s lease sale, offering a total of $5.246 billion bids in the sale. The MMS had 5,359 blocks (28.71 million acres) for lease, but only 723 received bids. Companies offered 1,428 bids in total, with 1.98 bids on average offered per block.

The most bids were for leases in waters deeper than 2,000 meters, with 190 blocks receiving bids. Another 187 blocks receiving bids in two areas: water depths less than 200 meters deep and in water depths 800-1,599 meters deep. In water 1,600-1,999 meters deep, 100 blocks received bids. Thirty-seven blocks received bids in waters 400-799 meters deep, and 22 blocks received bids in waters 200-399 meters deep.

The highest amount — $2.144 billion — was bid for blocks in waters 800-1,599 meters deep, followed by $1.379 billion for blocks in waters 1,600-2,000 meters deep. Another $1.33 billion was bid for blocks in waters deeper than 2,000 meters.

BP Exploration & Production Inc. led all of the companies bidding based on the total number of high bids received, with 83 bids totaling $107 million. However, Shell Offshore, in second place with 69 total high bids, was the highest bidder overall with $554.56 million total high bids.

In third place was Cobalt International Energy LP with 53 high bids totaling $211.3 million, followed by Chevron U.S.A. Inc. with 44 high bids totaling $283.35 million.

Nexen Petroleum Offshore U.S.A. Inc. was in fifth place with 30 high bids totaling $113 million, while L LOG Exploration Offshore Inc. was in sixth with 28 high bids totaling $98.7 million. Marathon Oil Co. was in seventh place with 27 high bids totaling $221.7 million, and Murphy Exploration and Production Co. was eighth with 26 bids totaling $161 million. Petrobras America Inc. also had 26 high bids totaling $108 million, as did Eni Petroleum US LLC, which had $47.8 million in total high bids.

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