The Bureau of Ocean Energy Management completed its required evaluation to ensure that the public receives fair market value for tracts leased as part of Western Gulf of Mexico Oil and Gas Lease Sale 238, which was held on August 20, 2014.
After extensive economic analysis, BOEM has awarded 80 leases on tracts covering 428,062 acres to successful high bidders who participated in the sale, which made 4,026 unleased blocks covering about 21.6 million acres available in offshore Texas. The accepted high bids are valued at $109,086,059.
Notably, 34 of the 80 awarded leases (43%) fell within or were contiguous with tracts located along the United States-Mexico maritime boundary, where the 2013 US-Mexico Transboundary Hydrocarbon Reservoirs Agreement signed by President Obama allows for cooperative exploration and development of shared hydrocarbon resources. The area includes the subsurface Perdido fold belt where a number of large geologic structures with the potential for hydrocarbon accumulations extend across the border.
During the sale, 14 companies submitted 93 bids totaling $135,463,114 on 81 tracts, with $109,951,644 offered in high bids. BOEM rejected one high bid totaling $865,585 after determining that the value of the bid was insufficient to provide the public with fair market value for the tract. BOEM may reoffer this tract as part of the next Western Gulf of Mexico sale, which is currently scheduled for August 2015.
The terms of Sale 238 continued a range of incentives to encourage diligent development and ensure a fair return to taxpayers — including escalating rental rates and tiered durational terms with relatively short base periods, followed by additional time under the same lease if the operator drills a well during the initial period.
The highest bid accepted was $16,788,800, submitted by ConocoPhillips Company for Alaminos Canyon, Block 431. The tract is at water depths between 800 – 1,600 meters (2,625 - 5,249 feet) and received two bids.
The sale’s results reflect strong continuing industry interest in the Gulf of Mexico and President Obama’s commitment to expand oil and natural gas production safely and responsibly -- reducing our dependence on foreign oil and supporting American energy jobs.
For more information on Sale 238 go to www.boem.gov/Sale-238/.