Gulf sale 196 to include 20.3 million acres

Western Gulf of Mexico Lease Sale 196, scheduled for Aug. 17 in New Orleans, La., will encompass 3,762 blocks covering 20.3 million acres, according to a final sale notice issued by the U.S. Minerals Management Service.

MMS said a revised provision to increase base rental rates and a minimum royalty has been adopted by the agency and will affect the upcoming lease sale. Rates will increase from $5 to $6.25 per acre in water depths of less than 200 meters and from $7.50 to $9.50 per acre for blocks in water depths greater than 200 meters.

MMS also said bidders should note that an application from Beacon Port LLC for the licensing of a deepwater port involving an LNG facility was received by the Coast Guard and Maritime Administration and will affect some blocks in the High Island and West Cameron areas.

Moreover, the final notice of sale also restates a recently adopted regulation that was not included in the proposed notice of sale, MMS said. The final rule, effective April 29, 2005, amended regulations to correct an unintended potential gap and administrative oversight in the original deep gas royalty rule by making leases located partly in water deeper than 200 meters and issued during lease sales held in 2001 and later years expressly eligible for royalty relief for drilling deep gas wells on leases not subject to deep water royalty relief, the agency said.

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