More than 29 million acres offshore Louisiana, Mississippi, Alabama and Florida, including some blocks in the Eastern Gulf of Mexico (GOM) Planning Area available for the first time in 20 years, will be up for lease next spring when the Interior Department’s Minerals Management Service (MMS) holds lease sales 206 and 224.
Lease sales 206 and 224 — for the Central GOM and Eastern GOM Planning Areas, respectively — will be held consecutively on March 19 in New Orleans.
The proposed lease sale 206 encompasses approximately 5,000 unleased blocks covering more than 28.5 million acres in the Central GOM Planning Area offshore Louisiana, Mississippi and Alabama. The acreage is located from three to 230 miles offshore in water depths from three meters to more than 3,400 meters. The MMS estimates that the area contains approximately 877 million to 1.457 billion bbl of oil and 3.653 Tcf to 5.892 Tcf of natural gas.
Sale 206 will offer the same area for lease as did Central Gulf Sale 205, which was held Oct. 3. The MMS reported that bids were received for only 723 of the 5,359 blocks included in that lease sale (see NGI, Oct. 8). Sale 205 resulted in $2.9 billion dollars in high bids, making it the agency’s second largest sale behind 1983’s Sale 72, which generated $3.46 billion in high bids.
The proposed lease sale 224, mandated by the Gulf of Mexico Energy Security Act of 2006, encompasses 118 whole or partial unleased blocks which cover 547,230 acres in the Eastern GOM Planning Area, 125 miles south of Florida and west of the Military Mission Line in water depths ranging from 810 meters to 3,113 meters. The MMS estimates that the area contains 100 million to 140 million bbl of oil and 0.16 Tcf to 0.34 Tcf of natural gas. It will be the only sale in the Eastern GOM to be held during the current Five Year Program.
Sale 224 will be the first sale in the Eastern GOM Planning Area to offer the blocks since 1988, and the first sale where sharing provisions of the 2006 law will start immediately, said Assistant Secretary for Land and Minerals Management C. Stephen Allred. Included in the legislation, signed into law by President Bush in December 2006, were provisions giving four Gulf coastal states — Texas, Louisiana, Mississippi and Alabama — a major share (37.5%) of the federal royalties from leasing to be used in restoring their receding coastal areas (see NGI, Dec. 25, 2006). The four states will share in revenue from all leases resulting from lease sale 224, Allred said.
The proposed notice of sale for lease sales 206 and 224 include an increase in the royalty rate to 18.75% and will include rental rates of $6.25/acre for tracts in waters 200 meters or less and $9.50/acre for tracts in deeper waters. Deepwater royalty relief is provided in lease sale 206 with price thresholds above which the relief will end set at $35.75/bbl of oil and $4.47/Mcf of gas, both based on 2006 dollars.
Detailed information about the sales is available on the MMS website, www.gomr.mms.gov.
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