Amerada Hess, BHP Billiton, Stone Energy, Pogo Producing and Tana Exploration were the top five companies based on total amount of high bids in the Minerals Management Service’s Central Gulf Lease Sale 190. The agency said 83 companies submitted $368.8 million in high bids, which was a 17% increase compared to Central Gulf Lease Sale 185 just last year. The total of all bids was $636.8 million.

The agency received 829 bids on 557 tracts. In the sale, 4,324 tracts comprising 23 million acres offshore Alabama, Louisiana and Mississippi were offered.

“The fact that this was the highest number of bids received in a Central Sale in the past six years is a clear indication of industry’s continued confidence in the Gulf as a source of energy for the nation,” said MMS Director Johnnie Burton.

While interest in the deepwater continues, the large number of tracts receiving bids in the ultra-deepwater is of particular note, MMS said. About 91 blocks in water depths greater than 1,600 meters received bids totaling $78 million. But the most noteworthy aspect of the sale was that 60% of the bids were on the shelf, where royalty relief is being offered for deep gas (below 15,000 feet). About 340 bids were received on blocks in water depths of zero to 199 meters and the sum of all those bids totaled $272.4 million.

MMS implemented the royalty relief rule on March 1. The agency said it expects the rule to lead to about 4.4 Tcf of additional gas supply on the market over the next 16 years. The rule provides a royalty suspension in the Gulf of Mexico on the first 15 Bcf of deep Shelf gas produced from depths greater than 15,000 feet and less than 18,000 feet or on the first 25 Bcf produced from 18,000 feet or deeper. Among other provisions, it also will grant a royalty suspension on the first 25 Bcf of gas from a second well that is 18,000 feet or deeper. In addition, it will provide a royalty suspension supplement of 5 Bcf to future lease production of gas and oil from any depth, for drilling a qualifying dry hole at 18,000 feet or deeper. The rule also provides credit on dry holes that were targeting deep gas.

MMS said the highest bid received in the lease sale was $35.3 million by Amerada Hess for Green Canyon Block 468. Hess also bid the most with 17 high bids for a total of $40.7 million. The second highest bid was $31.1 million from a group that includes Nexen, BHP Billiton, Anadarko and Unocal for Green Canyon Block 512. BHP Billiton bid the second highest amount in total, 32 bid for a total of $18.5 million.

The top five companies based on the total number of high bids were Magnum Hunter (55 high bids for a total of $8.4 million), BHP Billiton (32 high bids for $18.5 million), ChevronTexaco (29 high bids for $10 million), Remington Oil and Gas (25 for $4.6 million) and BP (24 for $8.2 million).

In last year’s Central Gulf lease sale 185, there were $315.5 million in high bids from 74 companies. It covered about 23.4 million acres/hectares offshore Louisiana, Mississippi and Alabama. A total of 2.8 million acres received bids.

Estimates of undiscovered economically recoverable hydrocarbons expected to be discovered and produced as a result of Lease Sale 190 sale are about 276 to 654 million bbl of oil and 1.59 to 3.30 Tcf of natural gas. Blocks are located from three to about 210 miles offshore in water depths ranging from four to more than 3,400 meters.

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