Given the current guidance for implementing the OCS Lands Act’s “fair market value” mandate, all 12 of BOEM’s Sale 261 bid rejections (table below) were warranted:
- All but one of the rejections was on a single bid tract.
- BOEM’s Mean of the Range-of-Value (MROV) estimates were 2.6 to 18.7 times the rejected bonus bids.
- The Adjusted Delayed Value (ADV), which takes into account the effects of delaying bonuses and future royalty payments, ranged from 1.3 to 9.2 times the high bids.
- Perhaps the closest calls were Chevron’s two Walker Ridge bids which had ADV to bid ratios of only 1.3 to 1.4.
The main concern going forward is the absence of a consistent, predictable leasing schedule for the 3.7% of the OCS that may be considered for leasing. BOEM’s new methodology, which will be applied at the next lease sale (whenever that might be), does not require the bureau to estimate the delay period between the sale being evaluated and the projected next lease sale. Given that the new 5 year plan calls for a maximum of 3 lease sales, the gap between sales has become a much more significant factor just as the new guidance is being implemented.
The new 5 year “leasing plan” is intended to restrain OCS production in deference to “net zero” pathways. This strategy discourages interest from exploration and production companies. US offshore leases, which are by far the world’s smallest, are even less attractive when you don’t know if and when you will be able to acquire the nearby tracts that may be needed for economical deepwater development. This is not the way to obtain fair market value for public resources.
| Block | No. of bids | High Bid ($) | MROV($) ADV($) | High Bidder | MROV/bid ADV/bid |
| MC 711 | 1 | 584,700 | 6,600,000 2,400,000 | bp | 11.3 4.1 |
| MC 896 | 1 | 641,628 | 6,100,000 1,600,000 | Shell | 9.5 2.5 |
| GC 182 | 1 | 800,085 | 3,900,000 2,600,000 | Anadarko | 4.9 3.2 |
| GC 183 | 1 | 800,085 | 9,100,000 6,000,000 | Anadarko | 11.4 7.5 |
| GC 226 | 1 | 800,085 | 2,100,000 1,600,000 | Anadarko | 2.6 2.0 |
| GC 227 | 2 | 974,628 | 13,000,000 9,000,000 | Shell | 13.3 9.2 |
| GC 345 | 1 | 1,095,615 | 13,000,000 5,300,000 | Murphy | 11.9 4.8 |
| GC 346 | 1 | 845,815 | 5,100,000 2,000,000 | Murphy | 6.4 2.4 |
| GC 549 | 1 | 800,085 | 15,000,000 6,900,000 | Anadarko | 18.7 8.6 |
| AT 237 | 1 | 909,899 | 8,300,000 3,000,000 | Equinor | 9.1 3.3 |
| WR 285 | 1 | 859,837 | 6,200,000 1,200,000 | Chevron | 7.2 1.4 |
| WR 329 | 1 | 595,837 | 4,400,000 770,000 | Chevron | 5.7 1.3 |
ADV=Adjusted Delayed Value, which takes into account delaying bonuses and royalties
Bud's Offshore Energy (BOE) 
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