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Gulf lease sale draws just $8.376M
Petroleum News
Eastern Gulf of Mexico Lease Sale 189 will go down in history as one of the smallest areawide sales thus far for the Gulf, attracting only 16 bids on 14 tracts and generating just $8.376 million in apparent high bids.
The lackluster response to the Dec. 10 sale indicates the best prospects were taken when the region was reopened to leasing in late 2001 with Sale 181. That sale drew 190 bids on 95 tracts and raised $340.5 million in high bids, among the best performances in gulf history considering the relatively small sale area.
“I’m satisfied and not really surprised by the level of bidding,” said Chris Oynes, gulf regional director for the US Minerals Management Service. “They went all out for the first sale. There was very heavy competition.”
In contrast, there was little competition in Sale 189. Only six companies participated — Shell Offshore, Nexen Petroleum, Murphy E&P, Dominion E&P, Newfield Exploration and Spinnaker Exploration. And of the 14 tracts that received bids, only one received more than one bid, DeSoto Canyon Block 353, located next to Marathon Oil’s Stegodon prospect. Shell and Nexen Petroleum joined forces to capture block 353 with a bid of $793,521, beating out a $443,000 joint bid by Dominion and Spinnaker and a $261,777 joint bid by Murphy and Newfield Exploration. Highest bid at sale $2.23 million However, the highest bid in Sale 189, for $2.23 million, was a single bid submitted by partners Shell and Nexen for DeSoto Canyon block 398, located just southeast of block 353. The companies also took nearby block 397 on a single bid of $616,251. Shell and Nexen also submitted single bids of $793,521 for DeSoto Canyon blocks 486 and 487, adjacent to blocks acquired by Shell in the 2001 lease sale.
In contrast, the largest bid in Sale 181 was for $26 million and was submitted by Anadarko Petroleum for Lloyd Ridge block 91, located in the southern part of the sale area. Dominion and Spinnaker, partners with Anadarko on the Spiderman discovery, submitted the second highest bid in Sale 189, for $1.31 million, for DeSoto Canyon block 663, southwest of Spiderman and next to Marathon’s Mammoth prospect. Separately, Dominion took nearby blocks 707 and 751 on single bids for a total of $551,100.
Murphy and Newfield also joined forces on DeSoto Canyon block 178, with a single winning bid of $442,700. The block is located next to BP’s King’s Peak, one of three gas field that feed the Canyon Express Pipeline.
Separately, Murphy nailed down acreage near Spiderman, including DeSoto Canyon block 578 for $227,500 and block 662 for $222,500. The company also paid $228,500 for DeSoto Canyon block 313, located next to Shell’s Shiloh prospect.
Murphy picked up DeSoto Canyon block 972 for $222,500. The block is adjacent to the company’s undrilled Dachshund prospect. Separately, Dominion submitted winning bids of $246,400 for DeSoto Canyon block 707 and $304,700 for block 751. Both are southwest of the Spiderman discovery.
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