The Bureau of Ocean Energy Management’s (BOEM) Western Gulf of Mexico Lease Sale 233 drew 61 bids totaling $144 million Wednesday.
The auction offered more than 21 million acres offshore Texas for oil and natural gas exploration and development with ConocoPhillips offering the highest bid of $30 million for Alaminos Canyon Block 475. Fields that are in production within the Alaminos Canyon 475 vicinity are Trident and Silvertip, Great White and Tobago, which produce to the Perdido Hub.
Twelve companies bid on 53 offshore blocks that contained Lower Tertiary play in both shallow and deep water. The agency offered 3,864 blocks in an area located nine to 250 miles offshore in water depths ranging from 16 to more than 10,975 feet.
“The number of tracts receiving bids is fairly low compared to many previous western sales when our leasing began in 1983. However, the good news is that the dollar value of the high-bid submitted puts this sale far from the bottom, maybe the seventh-lowest in terms of high bids,” stated John Rodi, BOEM Gulf of Mexico Regional Director in a conference call with reporters.
“This is a continuation of what we’ve seen in the past where companies are bidding on smaller tracts but focusing on those tracks and spending more money on those acquisitions,” he added.
The sale, part of the Interior’s Outer Continental Shelf Oil and Gas Leasing Five-Year Program, could lead to the production of up to 200 million barrels of oil and 938 billion cubic feet of natural gas, reported the organization.
When asked why this sale garnered such low fan-fare, Rodi stated “in the last year there hasn’t been much success in terms of exploration or discoveries in the Western area of the Gulf of Mexico. We believe companies are taking the time to review recently acquired properties before investing in more.”
BP plc did not participate in this sale, the agency noted.
This sale builds on two major Gulf of Mexico lease auctions in the past year-and-a-half. The Interior hosted Lease Sale 227 in March 2013 and Lease Sale 229 in November 2012, which combined, drew in a record amount of money to the federal government.
“I think this sale was good under the circumstances,” noted Rodi towards the end of the call. “I think we are continually pleased with the fact that companies are bidding and bidding in large amounts in the Gulf of Mexico.”
Lease Sale 233 is the last one for this year but BOEM is slated to host Lease Sale 225 in 2014.
“Safe and responsible development of the Gulf of Mexico’s vital energy resources will continue to help power our nation and drive our economy, generating jobs, fostering economic opportunities for local communities and reducing America’s dependence on foreign oil,” BOEM stated.