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June 23, 2015The downward turn in oil prices that has resulted in layoffs and other economic impacts to the Bayou Region does not appear to be affecting the industry’s appetite for deepwater drilling.
The U.S. Bureau of Ocean Energy Management’s evaluation of bids to for its most recent Gulf of Mexico lease offering shows strong continued interest in the deep water sector, a statement from the agency released Monday says.
The evaluation was for Gulf of Mexico Central Planning Area Oil and Gas Lease Sale 235. The sale, held on March 18,, made 7,788 unleased blocks covering about 41.2 million acres offshore Louisiana, Mississippi and Alabama available for lease.
“After extensive economic analysis, BOEM awarded 161 leases on tracts covering 923,711 acres to the successful high bidders who participated in the sale. The accepted high bids are valued at $533,090,640,” the agency’s statement reads.
During the sale, 42 companies submitted 195 bids totaling $583,201,520 on 169 tracts.
A total of $538,780,056 was received in high bids. BOEM rejected eight high bids, totaling $5,689,416, after determining that the value of those bids was insufficient to provide the public with fair market value for the tracts. BOEM will reoffer these tracts as part of the next Central Planning Area sale, which is currently scheduled for March of 2016.
The highest bid accepted was $52,224,107 submitted by Red Willow Offshore LLC and Houston Energy L.P. for Walker Ridge 107. The tract is in water depths of more than 5,250 feet and received two bids.
The terms and conditions of Sale 235 encourage diligent development, environmental protection and ensure a fair return to taxpayers, BOEM maintains.
“Although Sale 235 reflected current market conditions of lower oil and gas prices, the number of high bids and the number of bids in deep water were proportionately similar to last year’s central sale,” the statement says, noting that it illustrates “strong, continuing industry interest in the deep water Gulf of Mexico.”
