An early tally of results from the Mineral Management Service’s Central Gulf Lease Sale 190 looks impressive with 827 bids from 73 companies, which is quite a bit more than the 793 bids from 66 production companies in Central Gulf Lease Sale 185 last year. Lease Sale 190 will be held on Wednesday morning at 10 a.m. in New Orleans.

Last year’s Central Gulf lease sale benefited from royalty relief incentives to drill for deep-gas deposits located in the shallow-water shelf area of the Gulf of Mexico. Total bids were up from 697 bids on 506 tracts in 2002, indicating interest in the MMS’ royalty relief provisions and a response to high natural gas prices. Lease Sale 185 attracted $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.

Lease Sale 190 is the first lease sale that includes new royalty relief measures that went into effect in January. The new relief measures have a higher price threshold for when relief would be cut off, include credits for two dry holes and provide different relief measures for producers drilling at depths greater than 15,000 feet.

The lease sale will cover 22.6 million acres and 4,281 available blocks in the Central Gulf of Mexico Outer Continental Shelf planning area offshore Louisiana, Mississippi, and Alabama. Estimates of undiscovered economically recoverable hydrocarbons expected to be discovered and produced as a result of the 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.

©Copyright 2004 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.