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US Lease Sale 249 reaches US$121 million

Written by  Wednesday, 16 August 2017 14:36

The US Bureau of Ocean Management's (BOEM) Lease Sale 249 brought in high bids of US$121 million from 27 companies with a total of 99 bids earlier today (16 August).

Image from BOEM Facebook.

A total of 90 blocks were offered, spanning nearly 76 million acres offshore Texas, Louisiana, Mississippi, Alabama, and Florida for oil and gas exploration and development.

France’s Total E&P made the highest bid at $12.1 million for Garden Banks Block 1003, beating out Cobalt International Energy’s bid of $3.5 million.

Garden Banks 1003 is adjacent to Cobalt’s North Platte appraised discovery.

In addition, Total also won East Breaks Blocks 588, 589, 633, and 678; and Garden Banks Blocks 1007.

Chevron, which made the highest sum (15) of high bids at a total of $27.9 million, won a total of 15 blocks, including: Garden Banks 978; Alaminos Canyon Blocks 647, 770, 814, 858, 860, and 862; Keathley Canyon Blocks 53, 97, 213, 256, and 257; Mississippi Canyon 35; and Green Canyon Blocks 508 and 979.

Supermajor Shell won a total of 19 blocks, including: Alaminos Canyon Blocks 336, 337, 381, 685, 729, and 816; Mississippi Canyon Blocks 302, 829, and 849; Garden Banks Blocks 719, 720, 763, and 807; and Keathley Canyon Blocks 149, 150, 193, 194, 214, and 215.

"Deepwater (400+ m depth) blocks won the day today, with 76 blocks receiving 98% of high bid value at $118 million. The deepwater industry is emphasizing short-cycle, low-risk prospects above high-impact, wildcat drilling. Today we saw operators continue to focus on areas near existing infrastructure with a majority of bids close to existing hubs or appraised developments," says WoodMac Senior Research Analyst William Turner.“

Bids from Chevron, Shell and Total near pre-FID discoveries, Guadalupe and North Platte, were a vote of confidence in higher-risk, standalone developments with potential for higher rewards," says Turner.

Exxon made the second and third highest bids for Mississippi Canyon blocks. Exxon won Block 779 with a high bid of $10.8 million; and Block 823 with a high bid of $5.7 million.

Exxon made a total of seven high bids, and won East Breaks 634, and several other Mississippi Canyon Blocks including 824, 866, 868, and 912.

Anadarko won a total of 10 blocks, including East Breaks Blocks 818 and 862; Mississippi Canyon Blocks 40, 83, and 337; Grenn Canyon Blocks 429, 451, and 473; and Walker Ridge Blocks 881 and 925.

LLOG won three blocks in Mississippi Canyon, 476, 545, and 629. And LLOG Bluewater won six blocks; three in Green Canyon (568, 612, 955), and three in Walker Ridge (23, 28, 72).

Statoil subsidiary Statoil Gulf of Mexico won four blocks in Keathley Canyon, including Blocks 481, 525, 569, and 613.

Repsol won four blocks in Garden Banks Blocks (77, 78, 121, and 122).   

BP E&P won two Mississippi Canyon blocks, Blocks 820 and 864.

Arena Energy won two blocks in the Eugene Island, South Addition (Blocks 324 and 325); and Deep Gulf Energy III won Block 745 in Mississippi Canyon, and Block 705 in De Soto Canyon.

Companies that won one block each include: W&T Offshore (Ship Shoal Area, South Edition Block 346); Houston Energy (South Timbalier Block 235); Murphy E&P (Mississippi Canyon Block 556); Byron Energy (Grand Isle Area Block 95); Peregrine Oil & Gas (Galveston Area South Addition Block A133); Fieldwood Energy (Ship Shoal Area, South Addition Block 358); Apache Deepwater (Viosca Knoll Block 992); GufSlope Energy (Ship Shoal Area, South Addition Block 351); Topco Offshore (Vermilion Area 152); and Creatceous (East Cameron Area 37).

Today’s lease sale is shadowed by Lease Sale 247’s total value of $137 million for 90 blocks.

According to Turner, activity is down by roughly half from Central Lease Sale 247, with operators submitting a total bid value of $137 million for 90 blocks, a decrease of 57% and 45% respectively. The decrease in activity comes after the first increase in five years seen during the last sale in March. Lease Sale 249 marks the first lease sale under the Trump Administration’s new Outer Continental Shelf Oil and Gas Leasing Program for 2017-2022 (Five Year Program).

“While the results of today’s Gulf of Mexico oil and gas lease sale reflect market realities, they also demonstrate the offshore oil and gas industry’s commitment to the US Gulf of Mexico, even with extended low commodity prices and lingering regulatory dysfunction.  Industry has continually demonstrated a commitment to providing tremendous economic and energy benefits for our nation, despite the fact that unwise energy policies have closed over 94% of US offshore areas to leasing and exploratory activities.  Offshore lease sales in the Gulf of Mexico contributed $80 billion to the US Treasury between 2005 and 2014 alone,” says National Ocean Industries Association (NOIA) President Randall Luthi.

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2018-08-21 06:17:51pm