Oil and gas companies offered high bids of $159.4 million last week for federal leases in the Gulf of Mexico, down from sales in March and a year ago.
The Bureau of Ocean Energy Management says 29 companies bid on 144 tracts. That’s about 1% of the tracts offered, The Associated Press reports.
“The somewhat modest results of lease sale 253 reflect the cautiously optimistic attitude of an offshore industry still in recovery,” Nicolette Nye, vice president of communications for the National Ocean Industries Association, said in a prepared statement. “While companies have improved the efficiency of their operations and rig rates and supply chain prices are more competitive, oil prices remain flat.”
The block garnering the most bids was Mississippi Canyon south of New Orleans. Block 124 of the Green Canyon, due south of Baton Rouge, drew both the highest overall bid of the day and the highest bid per acre, at just over $22.5 million—or $3,908 per acre—from BHP Billiton Petroleum (Deepwater) Inc.
Other high bids from the sale were from Chevron U.S.A. Inc., $6.7 million for Block 937 Mississippi Canyon; Shell Offshore Inc., $5.6 million for the Alaminos Canyon in the western Gulf of Mexico; and Anadarko US Offshore LLC, $4.2 million for the Keathley Canyon and just over $4 million each for blocks 503 and 504 in Walker Ridge, all off the coast of Texas.
BHP Billiton Petroleum submitted the most high bids of the day—20 of them at a combined total of nearly $41.85 million.
“While we saw companies pick up acreage near remote areas, the infrastructure-rich Mississippi Canyon was the bid engine of the sale, capturing roughly 25% of total bids,” Wood Mackenzie research analyst Michael Murphy told the trade journal Natural Gas Intelligence. “Infrastructure-led exploration continues to be a theme that companies are playing into.”
The March sale drew $244.3 million in high bids on 227 tracts, and the one in August 2018 brought $178.1 million in bids on 144 tracts.
A news release said this year’s total high bids are the highest since 2015.
Agency statistics indicate totals of $419.2 million this year and $561.5 million in 2015. Totals were $174.5 million in 2016, $395.9 million in 2017 and $302.8 million last year.
In the decade preceding 2015, Gulf lease sales averaged $1.6 billion a year.