The Western Gulf of Mexico has always been treated like the poor stepchild compared to its more prolific Central cousin and its virtually untapped Eastern counterpart. Add a worldwide recession and depressed commodity prices, and you’re left with lease sale figures that show at most lukewarm interest.
This week’s Western Gulf of Mexico sale, #210, received a total of 189 bids on 162 blocks. This compares to 423 bids on 319 blocks at last year’s sale. Only 27 companies bid this year compared to 47 last year, and it attracted a total of $115.5 million in high bids.
The US Minerals Management Service (MMS) reported that the sum of all bids was $145.2 million, and the highest bid was $28.1 million for Keathley Canyon Block 86, submitted by BP Exploration & Production Inc. About 80% of the bids were on deepwater blocks, with 10% chasing ultra-deepwater areas. This was down from 21% last year.
The lackluster interest in the sale is evidenced by the bid distribution map available on the MMS website (http://www.gomr.mms.gov/homepg/lsesale/210/sale210_bid.pdf). Only two tracts received three bids, and the map shows little consensus on any “hot” areas, though a few hazy trends are visible.
Apparently the numbers were in line with MMS expectations. Platt’s Oil News interviewed Gulf Regional Director Lars Herbst Tuesday, and he said the number of bids was not a surprise to the agency “given current economic conditions that have caused E&P companies to rein in activity and a natural gas surplus that has kept prices low.”
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