The Minerals Management Service’s (MMS) lease sale last Wednesday in the Central Gulf of Mexico (Sale 182) drew high bids of $363.2 million from 77 companies, with Phillips Petroleum emerging as the highest bidder on a single block at $17.6 million. Dominion Exploration & Production, however, was the heaviest overall spender, shelling out $37.02 million on 37 blocks.

This was a “pretty good sale overall,” said MMS spokeswoman Debra Winbush, adding that five of the last 10 Central Gulf sales fared better, while five were worse. “This was not the most successful sale we’ve had, but it was not the lowest either,” she told NGI.

Department of Interior’s MMS received total bids of $442.4 million on 506 tracts comprising 2.5 million acres offshore Alabama, Louisiana and Mississippi. This was out of a total of 4,446 tracts/blocks offered. Bidding activity was very heavy in the shallow water, with 288 tracts in less than 200 meters of water snaring 405 bids. This represented 57% of the sale, according to MMS. It estimated that about 31% of the tracts receiving bids were in ultra-deep water (more than 800 meters).

The attraction of independent and major producers to the shallow waters of the Central Gulf was prompted by the agency’s newest incentive of royalty relief for deep gas deposits, MMS said. Under the incentive, the first 20 Bcf of gas production from 15,000 feet or greater is royalty free.

Phillips Petroleum bid the $17 million-plus for Green Canyon 199 in the deep-water Gulf. Other high bidders on a single tract included: Chevron U.S.A., PanCanadian Gulf of Mexico Inc. and Enterprise Oil Gulf of Mexico Inc. ($14.85 million); BP Exploration & Production ($14.25 million); Chevron U.S.A., PanCanadian Gulf of Mexico and Enterprise ($12.36 million); Dominion Exploration & Production and Spinnaker Exploration Co. ($8.25 million); Dominion E&P and Spinnaker ($7.35 million); Dominion E&P, Murphy Exploration & Production and Spinnaker ($7.17 million); Shell Offshore Inc. ($6.5 million); Dominion E&P and Spinnaker ($6.36 million); and Ocean Energy Inc. ($6.16 million).

Following Dominion E&P ($37 million) as the heaviest spenders overall in the Central Gulf were Spinnaker ($28.7 million); BP Exploration ($27.24 million); Chevron U.S.A. ($26.6 million); Phillips Petroleum ($17.46 million); Kerr-McGee Oil & Gas Corp. ($15.34 million); Shell Offshore ($15.315 million); BHP Petroleum Inc. ($15.312 million); Nexen Petroleum Offshore U.S.A. Inc. ($13.66 million); and Mariner Energy Inc. ($10.94 million).

©Copyright 2002 Intelligence Press Inc. Allrights reserved. The preceding news report may not be republishedor redistributed, in whole or in part, in any form, without priorwritten consent of Intelligence Press, Inc.