Gulf of Mexico Oil and Gas Lease Sale Raises Just $18 Million

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August 24, 2016

A semisubmersible drilling rig in the Gulf of Mexico. Credit: Statoil

A U.S. government oil and gas lease sale covering the Western Gulf of Mexico garnered just $18 million in high bids on Wednesday, a reflection of the prolonged weak oil and gas market.

According to the BOEM, today’s sale offered 23.8 million acres in federal waters offshore Texas for oil and gas exploration and development. A total of three offshore energy companies participated in 24 bids for 24 tracts covering 138,240 total acres. The sum of the high bids totaled $18,067,020.

For comparison, a Western Gulf of Mexico lease sale held in August 2014, when the price of oil was still hovering around $100 per barrel, received a total of $109,951,644 in high bids.

“The Gulf of Mexico continues to be one of the most productive basins in the world and is an important part of our Nation’s domestic energy portfolio,” said Hopper. “Though this sale reflects today’s market conditions and industry’s current development strategy, the bidding confirms that there is continued interest in the deepwater areas of the Gulf”.

Today’s auction in New Orleans is the eleventh Gulf of Mexico offshore sale and the final one for the Western Planning Area under the Administration’s Outer Continental Shelf Oil and Gas Leasing Program for 2012-2017 (Five Year Program). The first ten sales in the current Five Year Program have offered more than 60 million acres and netted nearly $3 billion for American taxpayers.

Sale 248 included approximately 4,399 blocks, located from nine to 250 nautical miles offshore, in water depths ranging from 16 to more than 10,975 feet (5 to 3,340 meters). As a result of offering this area for lease, BOEM estimates a range of economically recoverable hydrocarbons to be discovered and produced of 116 to 200 million barrels of oil and 538 to 938 billion cubic feet of natural gas.

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