Despite $15 oil and the whopping $810 million federal CentralGulf of Mexico lease sale three weeks ago, oil and gas prospectorshad enough shekels remaining to make the Texas General Land Officesale April 7 the largest high bids sale in 22 years and the seventhlargest in the history of the 150-plus-year old agency.

The sale raised nearly $34.7 million in apparent high bids forthe right to explore and produce on state lands. Most bids were forGulf of Mexico tracts. Several were offshore Galveston Island wherenatural gas production is the probable goal of bidders, the LandOffice said. “There have been recent declines in the price of oil,but the price of natural gas is holding up just fine,” said GaryMauro, Texas land commissioner. “These sale results clearly showthat the Texas oil and gas industry is optimistic about its future.We had eight bids over $1 million, with the highest being $1.6million on one tract.” That bid came from Cockrell Oil & Gas,Houston, for 995 acres in the offshore Mustang Island, KlebergCounty area in far South Texas.

CNG Producing submitted the highest per acre bid – $1,817 anacre – in the history of Texas state lease sales for 720 acres inthe same area. CNG had apparent winning bids totalling $3,742,876on six tracts in the Mustang Island area. Samedan Oil, Midland, bid$1.54 million for 1,736 acres in the western reaches of GalvestonBay and appears to have taken nine other leases in the West Bayarea with bids aggregating nearly $6.1 million.

The $34.7 million brought in Tuesday continued an upward trendof the last two years. Last October’s sale brought in $23.6million, and last April’s sale brought in $26.6 million. Sales areheld twice a year. From 1985 to 1994, totals were between $6million and $22 million. Amounts began trending upward from 1995 to1996 when totals rose to the $30 to $40 million range and continuedin 1996-97 with totals reaching $50.2 million. The best years everwere in the late 1970s and early 1980s when skyrocketing energyprices pushed lease sales up to about $95 million. Last April’s$26.6 million was the best for a single lease sale since October1984 when $27.8 million in high bids was offered.

©Copyright 1998 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press,Inc.