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Posts Tagged ‘Green Canyon’

Sale BBG2 “sweet spot”

Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged , , , , , , , , , , on March 18, 2026| Leave a Comment »

red=blocks receiving bids at BBG2; blue=BBG1 and Sale 261 leases; green=active leases issued prior to Sale 261

Although bidding at Sale BBG2 was rather subdued, Gulf heavyweights BP, Chevron, Shell, and Oxy/Anadarko, along with increasingly important Woodside Energy, competed for the 4 red blocks in the Green Canyon area (map above and table below). These elephant hunters presumably see excellent Paleogene (Wilcox) prospectivity in those blocks.

17 of the sale’s 38 bids (45%) and $32.8 milion of the sale’s $47 million in high bids (70%) were for these 4 blocks. BP’s $21 million bid for GC 404 was by far the sale’s highest bid.

Green Canyon
Block No.		No. of biddersHigh BidderBid
4045BP$21,009,990
4052BP$885,99
4485Chevron$4,967,067
4925Chevron$5,887,188

At this time, the high costs and technical complexities (e.g. deepwaterand high pressure/high temperature reservoirs) limit Wilcox development to major oil companies and well financed, technically savvy independents. Expect some of the international majors that did not participate in BBG2 to acquire lease interest at a later date, which will again raise questions about the merits of joint bidding restrictions.

From AAPG graphic-Wilcox trend map. Eastern area can be subdivided into an outboard and inboard trend, with wells in the latter area showing variable thickness due to salt tectonics contemporaneous with deposition (From Zarra et al. 2019’s AAPG Search and Discovery article).

Imbedded below is a good presentation on the Paleogene Wilcox by Dr. Mike Sweet, Univ. of Texas:

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How did the govt fare on the Sale 259 bid rejections?

Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged , , , , , , , , on January 2, 2024| Leave a Comment »

Keathley Canyon and Walker Ridge bids at Sale 259: blue=1 bid, red=2 bids, green=3 bids

Based solely on a comparison of the bids (Sale 261 vs. Sale 259), the Sale 259 rejections were, on balance, to the benefit of the public (table below). On the plus side:

  • Assuming all of the high Sale 261 bids are accepted, the net gain to the US Treasury is $8,749,365
  • Of the 14 tracts with rejected high bids at Sale 259, 8 received bids at Sale 261
  • Seven of those 8 bids were higher than the Sale 259 high bids, and 5 of those 7 were more than $1 million higher.
  • The Sale 259 bid rejections in the Keathley Canyon and Walker Ridge areas proved to be 100% beneficial. All 6 of those tracts received much higher bids at Sale 261.
  • The best BOEM decisions were the rejections of the Sale 259 bids for AT 5 and WR 795 and 796. The Sale 261 high bids on these 3 tracts were $10.8 million higher than the Sale 259 bids.
  • WR 795 and 796 were single bid tracts at Sale 259.
  • AT 5 received 3 bids at Sale 259. BOEM rejected the high bid despite the competitive bidding. That proved to be the right call given that the Sale 261 high bid was $3.5 million higher.

On the other hand:

  • None of the 5 Green Canyon rejections received any bids at Sale 261.
  • The high bid for GC 777 was rejected twice (Sales 257 and 259) at a cost of $1.8 million, the BP/Talos high bid at Sale 257. At sale 259, BP was the sole bidder for GC 777, and their bid was only $583,000, less than 1/3 of their Sale 257 bid. GC 777 received no bids at Sale 261.
  • The worst BOEM Sale 259 decisions were the rejections of the DC 622, GC 547, and GC 591 bids at a cost of $4.6 million ($5.2 if the Sale 261 bid for DC 622 is rejected).
  • This is not to say that the tracts with rejected bids will not ultimately be leased. However, the uncertainty regarding future sales changes the historic GoM leasing dynamic. The next opportunity for purchasing unleased tracts is a troubling unknown. Absent leasing and exploration, their resource and revenue potential will never be known.
area and blockSale 259 high bid – companySale 261 high bidgovt gain (loss)
DC 6222,101,836 – Shell615,628* – Shell(1,486,208)
GC 173307,107 – Woodsideno bid(307,107)
GC 5471,783,498 – Chevronno bid(1,783,498)
GC 5911,291,993 – Chevronno bid(1,291,993)
GC 642605,505 – Anadarkono bid(605,505)
GC 777583,103 – bpno bid(583,103)
AT 51,551,130 – Anadarko5,215,628* – Shell3,664,498
AT 133607,107 – Woodsideno bid(607,107)
KC 745707,777 – Beacon2,422,222 – Beacon1,714,445
KC 789707,777 – Beacon2,143,299 – Beacon1,435,522
WR 794724,744 – Beacon1,487,624 – Beacon762,880
WR 795774,242 – Beacon5,301,107 – Woodside4,526,865
WR 796774,242 – Beacon3,310,107 – Woodside2,535,865
WR 750724,744 – Beacon1,498,555 – Beacon773,811
*The BOEM sale 261 bid summary misidentifies the DC 622 and AT 5 bids as being for MC 622 and GC 5 respectively. The corrected identification above is based on the “Blocks Receiving Bids” file correlated with the block number and company code.

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