MMS rejects 19 bids from lease sale, ends up collecting $342M in bonuses

Nineteen winning bids submitted in last March’s Central Gulf of Mexico Lease Sale 194 were rejected by the U.S. Minerals Management Service because they did not meet the agency’s standard for fair market value, MMS said June 24.

Additionally, MMS said an unidentified participant in the sale refused to accept six leases it won on sale day, resulting in the company’s forfeiture of one-fifth of its bid deposit on each of the leases totaling just $674.

However, the remaining $97,000 or four-fifths of the bonuses not collected by MMS, plus the $11.9 million in rejected bids, reduced the government’s adjusted take from the sale to $342.03 million from initial apparent high bids of $353.9 million.

Lease Sale 194 attracted 80 companies that submitted 651 bids on 428 exploration blocks. With the after-sale adjustments, 403 blocks were awarded. The highest bid accepted on a tract was $21.2 million by Dominion Exploration & Production and Stone Energy for West Cameron Block 132. The tract received eight bids.

—Ray Tyson