Federal Lease Sale Draws Second Highest Bid Totals

Monday, October 15, 2007
The U.S. Department of the Interior’s Minerals Management Service recent central Gulf of Mexico lease sale received 1,428 bids on 723 tracts, attracting $2.9 billion in high bids – the second highest total in U.S. leasing history.

Secretary of the Interior Dirk Kempthorne, who officially opened the sale, said the bids made a statement concerning the future of the Gulf of Mexico.

“This historic sale emphasizes the Gulf’s strategic value for America’s energy security and the significant economic benefits of environmentally safe oil and gas production for the nation and the Gulf states,” Kempthorne said.

The Gulf accounts for about a quarter of domestically produced oil and 15 percent of domestically produced natural gas in the nation. More than 30,000 jobs are directly related to Gulf energy exploration and production.

The sale offered 5,359 tracts on 28.7 million acres in federal areas off the coast of Louisiana, Mississippi and Alabama. The 723 tracts receiving winning bids could produce 776 million to 1.3 billion barrels of oil and 3.2 to 5.2 trillion cubic feet of natural gas, interior officials estimate.

The highest bid received was for Walker Ridge Block 7, a $90.5 million bid by Shell Offshore Inc.

“The progress being made both in terms of discoveries and advanced technology provide incentive for operators to explore these frontier areas,” said Randall Luthi, director of the Minerals Management Service.

The top five companies submitting the highest dollar amount of high bids for the sale included: Shell Offshore Inc., 69 high bids, $554.5 million; Chevron USA Inc., 44 high bids, $283.3 million; Marathon Oil Co., 27 high bids, $221.7 million; Cobalt International Energy LP, 53 high bids, $211.3 million; and Murphy Exploration and Production Co., 26 high bids, $161 million.

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