Gulf Oil and Gas Lease Sale Nets More Than $1.5 Billion in Bids

Yahoo Contributor Network

In what Department of the Interior secretary Ken Salazar called a reflection of "strong, continuing industry interest in the Gulf of Mexico," an oil and gas lease sale in the central Gulf shore off Louisiana, Mississippi and Alabama netted more than $1.5 billion in bids this week. Here are the details.

* According to the Department of the Interior, Lease Sale 227 was conducted by the Interior's Bureau of Ocean Energy Management and included about 38.6 million acres, located from three to about 230 nautical miles offshore.

* The Bureau of Ocean Energy Management estimates that the areas that were available for sale could result in the production of up to 890 million barrels of oil, and 3.9 trillion cubic feet of natural gas, the department reported.

* The high bids for the sale totaled $1,214,675,536.

* The terms of the sale include environmental protection measures as well as a "range of incentives to encourage diligent development and ensure a fair return to taxpayers," the department stated.

* Those incentives include an increased minimum bid for deepwater tracts, escalating rental rates and relatively short base periods followed by additional time under the same lease if the operator drills a well, stated the department.

* The Bureau of Ocean Energy Management stated earlier this week that 407 bids by 47 companies on 320 offshore blocks were received.

* One of the companies that reported success at the sale is Venari Resources LLC. On Thursday, Venari Resources issued a statement that it was successful with 15 of its 18 bids for a total expenditure of $86.8 millon.

* Among Venari's successful bids was the most competitively bid block in the lease sale, on Walker Ridge, which it won with a price of $45.5 million.

* Venari Resources describes itself as a privately held offshore exploration and production company founded in 2012. Brian Reinsborough, CEO and president of the company stated that the lease sale further establishes Venari's "deep and robust portfolio."

* According to the Interior Department, this week's sale follows a November sale that made more than 20 million acres available and one last June in which more than 39 million acres are available.

* This week's sale was the first of five scheduled Central Gulf of Mexico lease sales that are planned under the department's new five year program.

* "The central Gulf of Mexico is one of the cornerstones of the United States' domestic energy portfolio," said Bureau of Ocean Energy Management director Tommy P. Beaudreau, "and is central to meeting the nation's energy needs and fueling the economy."

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