BP Exploration & Production Inc. and Statoil Gulf of Mexico LLC were revealed to be the big players at the table Wednesday when the Minerals Management Service (MMS) unveiled the winning bids in its Western Gulf of Mexico (GOM) oil and natural gas Lease Sale 204. In all, winning bids for the 282 tracts offered totaled $290 million.
When the sealed bids were opened in New Orleans, BP was found to have submitted the most high bids — 91 — with a total value of $31 million, followed by Statoil’s 36 high bids, valued at $138.9 million, according to figures released by MMS. Statoil’s winning bids accounted for 48% of the $290 million in high bids entered by all companies participating in the lease sale. Petrobras America Inc. ranked third in most high bids (34) and had the third highest winning bid total ($29.3 million) in the auction.
A total of 358 bids, valued at $369.5 million, were placed on 282 tracts up for lease. MMS had offered a total of 3,338 tracts on 18 million acres offshore Texas.
“The success of this lease sale once again demonstrates industry’s commitment and interest in the Gulf,” said MMS Director Randall Luthi. “The bidding in this sale is an indicator that the Gulf of Mexico will continue to be a strong source for the nation’s energy production in the future.”
Other companies active in the bidding included Devon Energy Production Company LP (26 high bids valued at $20.0 million), ConocoPhillips Company (24 high bids valued at $12.3 million) and Shell Offshore Inc. (11 high bids valued at $23.3 million).
Last year’s Western Gulf of Mexico Lease Sale 200, which garnered $340.9 million from 62 companies, was called the best Gulf of Mexico sale in nearly a decade (see Power Market Today, Aug. 18, 2006).
Following lease sales, MMS requires high bidders to pay one-fifth of their bids in advance. MMS geologists review the potential oil and gas prospects of each lease that was bid on to determine if the agency is receiving a fair value. The review period could take up to 90 days. If a bid is accepted, high bidders will then pay the remaining four-fifths of their bids, as well as first-year rental payments.
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