BOEM done with GOM lease sale evaluation. 10 bids rejected

The U.S. Bureau of Ocean Energy Management (BOEM) completed its required evaluation of offers received for offshore blocks in Central Gulf of Mexico Oil and Gas Lease Sale 247, held on March 22, 2017. The sale offered 9,118 unleased blocks, covering 48 million acres.

During Sale 247, 28 companies participated in submitting 189 bids on 163 tracts. A total of $274,797,434 was received in high bids covering 913,542.21 acres. Of the tracts receiving bids, 22 were in water depths less than 200 meters and 141 were in water depths greater than 200 meters.

After geological, geophysical, engineering, and economic analysis, BOEM awarded 153 tracts receiving bids and rejected 10 high bids. The 10 rejected high bids totaled $10,848,507 and covered 56,365.79 acres.

“BOEM has determined that the value of those bids was insufficient to provide the public with fair market value for the tracts and will re-offer these tracts as part of the next lease sale, Sale 249 in August,” BOEM said.

The highest bid accepted was $24,056,719 submitted by Shell Offshore Inc. for Atwater Valley 64. Interestingly, Shell would’ve won the the block even if it had offered $20 million less. Namely, its  competitors for block 64 were Statoil and LLOG which had offered $3.6 million and $1.6 million respectively.

The second highest bid for a single block came from Statoil at $21 million, followed by Hess at $18 million, Total at $12 million, Chevron at $11 million etc…

The tract receiving the greatest number bids was Garden Banks 1006 with five bids.