Leslie Beyer, Assistant Secretary for Land and Minerals Management (ASLM), has stepped down from her post as the leader of the Dept of the Interior’s offshore energy programs. She was the senior official at this month’s BGG1 lease sale, and made strong remarks about the importance of the offshore oil and gas program. Ms. Beyer was confirmed by the Senate in September.
Lanny Erdos, Director, Office of Surface Mining Reclamation and Enforcement, has been named Acting ASLM.
This leaves the offshore energy program without a confirmed Asst. Secretary and with Acting Directors at both BOEM (Matthew Giacona) and BSEE (Kenny Stevens).
BOEM informs (post below) that Wednesday’s BBG1 oil and gas lease sale will be streamed live here at 10 AM ET. Given that this is the first sale in two years and the first BBG sale, some dignitaries may be in attendance.
On December 10, we will host the Big Beautiful Gulf 1 oil and gas lease sale, our first under the One Big Beautiful Bill Act.
In JPMorgan’s view, the stage is set for a potential decline of as much as 50% in oil prices through the end of 2027, taking Brent crude down to the low $30s per barrel range from its current level of around $63.50.
Will bearish forecasts by JPMorgan and others temper bidding at the highly anticipated, and long awaited, Gulf lease sale to be held on 12/10/2025? Probably not for these reasons:
Given the longer term nature of deepwater development, production will not begin for years following lease issuance. Note that anticipated first production for 3 new high-pressure deepwater projects, Kaskida, Sparta, and Tiber, will be 23, 16, and 21 years after the field discovery dates.
To the extent that price forecasts are reliable at all (see no. 9 in the image below), the degree of uncertainty for longer term forecasts is particularly high.
The sale has to live up to its name Big Beautiful Gulf 1 (BBG1). 😉
The first ever Gulf of America oil and gas lease sale 😉 will be held on Dec. 10, 2025. Instead of numbering the sale sequentially (i.e. Sale 262), the sale has been designated OCS Oil and Gas One Big Beautiful Bill Act Lease Sale 1 (BBG1). 🙄 This change is a bit too cute for some of us old-timers, but we’ll judge the sale by its results, not its name.
The Notice of Sale is attached. The terms are very attractive, with the lowest allowable royalty rate (1/8th) on all shelf and deepwater leases. Note the comparison of royalty rates in the table below. The 6.25% difference for deepwater leases is substantial when you consider their high production potential.
Gulf Sale No.
Date
% royalty: <200m water depth
% royalty: >200m water depth
256
11/18/2020
12.5
18.75
257
11/17/2021
12.5
18.75
258
12/30/2022
18.75
18.75
259
3/29/2023
18.75
18.75
261
12/20/2023
18.75
18.75
BBG1
12/10/2025
12.5
12.5
The rental rates for the BBG1 Sale are also very attractive compared to Sale 261:
Water Depth
Sale 261 rental rates ($/ac)
BBG1 Sale rental rates ($/ac)
0 to <200m
years 1-5: $10 year 6: $20 year 7: $30 year 8+: $40
years 1-5: $7 year 6: $14 year 7: $21 year 8+: $28
200 to <400m
years 1-5: $16 year 6: $32 year 7: $48 year 8+: $64
years 1-5: $11 year 6: $22 year 7: $33 year 8+: $44
400+ m
years 1-5: $16 year 6: $22 year 7: $22 year 8+: $22
years 1-5: $11 year 6: $16 year 7: $16 year 8+: $16
Will the bidding reflect the very favorable lease terms?
Bud's Offshore Energy (BOE) 