Between the lines: $178 million on Gulf of Mexico drilling lease sales
- Ben Geman, author of Axios Generate
An oil tanker at sunset near Galveston, Texas. Photo: Dave Walsh/VW Pics/UIG via Getty Images
Yesterday's Gulf of Mexico lease sale drew $178 million in winning bids from oil companies, spanning 144 tracts in the region that cover around 800,000 acres.
The big picture: The total was very modest by comparison to many sales in the past, including auctions in the mid-2000s, when high oil prices led to high bids totaling several billion dollars.
- Reuters notes that oil companies showed "tepid interest." But it was still $53 million more than the $125 million in winning bids from the Gulf of Mexico sale last March.
What they're saying: "With an increase in competitive bids and dollar amount from the last round, companies demonstrated their continued confidence in the region," Wood Mackenzie analyst William Turner said in a short note.
- He added: "Increased competition centering around more selective blocks close to infrastructure tells us that capital is returning to the Gulf of Mexico."
By the numbers: The largest single bid came from Hess, which offered $26 million for a block in the Mississippi Canyon region off Louisiana's coast. Exxon had the highest total amount of winning bids at $40.6 million.
- All of Interior's data for the sale is here.
Between the lines: This S&P Global Platts story looks at companies' strategies in the sale, noting interest in frontier prospects that are long-term bets. From their piece...
"Bidders in Lease Sale 251 appeared more willing to focus on deepwater exploratory prospects than in the last couple of auctions, when companies chose acreage for its proximity to infrastructure and near-term production prospects, Mike Celata, regional Gulf director for the US Bureau of Ocean Energy Management, said."