Gulf of Mexico lease sale 246 yields $22.7 million in high bids

NEW ORLEANS, Louisiana -- The Bureau of Ocean Energy Management (BOEM) held an oil and gas lease sale Wednesday for the Western Gulf of Mexico that drew $22,675,212 in high bids for tracts on the U.S. Outer Continental Shelf offshore Texas.

A total of 5 offshore energy companies submitted 33 bids on 33 tracts, covering about 190,080 acres. The sum of all bids received totaled $22,675,212.

“While this sale reflects today’s market conditions and industry’s current development strategy, it underscores a steady, continued interest in developing deep water federal offshore oil and gas resources,” said BOEM Director Abigail Ross Hopper.

Lease Sale 246 builds on the first seven sales held under the Obama Administration’s Outer Continental Shelf Oil and Gas Leasing Program for 2012-2017 (Five Year Program) that offered more than 60 million acres for development, garnered $2.9 billion in bid revenues and awarded 1,038 leases. The Five Year Program makes available all offshore areas with the highest resource potential and includes 75% of the nation’s undiscovered, technically recoverable offshore oil and gas resources.

“As one the most productive basins in the world, the Gulf of Mexico continues to be the keystone of the Nation’s offshore oil and gas resources,” Hopper said. “The continuing drop in oil prices and low natural gas prices obviously affect industry’s short-term investment decisions, but the Gulf’s long-term value to the nation remains high and the President’s energy strategy continues to offer millions of offshore acres for development while protecting the human, marine and coastal environments, and ensuring a fair return to the American people.”

Lease Sale 246 offered 4,083 unleased blocks, covering about 21.9 million acres, located from nine to 250 nautical miles offshore in water depths ranging from 16 ft to more than 10,975.

The lease terms include a range of incentives to encourage diligent development and ensure a fair return to taxpayers. The leases would also allow a lessee to earn a longer lease term for spudding a well in deeper water or by drilling to a minimum target depth.

Following Wednesday's sale, each bid will go through a strict evaluation process within BOEM to ensure the public receives fair market value before a lease is awarded.