GoM Sale Yields $110m in High Bids

Posted by Eric Haun
Wednesday, August 20, 2014

As part of President Obama’s all-of-the-above energy strategy to continue to expand safe and responsible domestic energy production, today’s Western Gulf of Mexico Lease Sale 238 attracted $109,951,644 million in high bids for 81 tracts covering 433,823 acres on the U.S. Outer Continental Shelf offshore Texas. A total of 14 offshore energy companies submitted 93 bids.

“This sale underscores the President’s commitment to create jobs and home-grown energy through the safe and responsible exploration and development of offshore energy resources,” said Interior Deputy Secretary Mike Connor. “The Gulf of Mexico has been and will continue to be a cornerstone of our domestic energy portfolio, with vital energy resources that spur economic opportunities and further reduce our dependence on foreign oil.”

Today’s lease sale, which offered 21.6 million acres, builds on five previous sales held under the Obama Administration’s Outer Continental Shelf Oil and Gas Leasing Program for 2012-2017 (Five Year Program). These five lease sales have offered more than 60 million acres for development, and garnered $2.3 billion in bid revenues.

"The Gulf of Mexico is one of the most productive basins in the world, and the Obama Administration’s robust Five Year Program supports a balanced approach that encourages the development of the Gulf’s offshore oil and gas resources, while protecting the human, marine and coastal environments and ensuring a fair return to the American people," said Connor.

Today’s sale offered all unleased areas (excluding those located in the Flower Garden Banks National Marine Sanctuary) in the Western Gulf of Mexico planning area, including 4,026 tracts from nine to more than 250 miles off the coast, in depths ranging from 16 to more than 10,975 feet (five to 3,346 meters). BOEM estimates the lease sale could result in the production of 116 to 200 million barrels of oil and 538 to 938 billion cubic feet of natural gas.

Today, 167 of the blocks available for lease were located or partially located within three statute miles of the maritime and continental shelf boundary with Mexico. Leases issued on these blocks are subject to the terms of the U.S. - Mexico Transboundary Hydrocarbon Reservoirs Agreement and 24 of those blocks received bids.

BOEM established the terms for the leases offered in today’s sale after extensive environmental analysis, public comment and consideration of the best scientific information available. The terms include measures to protect the environment, such as stipulations requiring that operators protect biologically sensitive features, as well as providing trained observers to monitor marine mammals and sea turtles to ensure compliance and restrict operations when conditions warrant.

The terms also continue a range of incentives to encourage diligent development and ensure a fair return to taxpayers, including an increased minimum bid for deepwater tracts, escalating rental rates and tiered durational terms with relatively short base periods followed by additional time under the same lease if the operator drills a well during the initial period.

Following today’s sales, each bid will go through a strict evaluation process within BOEM to ensure the public receives fair market value before a lease is awarded.
 

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