Feeds:
Posts
Comments

Posts Tagged ‘Gulf of America’

The events that led to the Strategic Petroleum Reserve also drove the rapid expansion of the offshore program

Posted in Alaska, California, energy policy, Georges Bank, Gulf of Mexico, Offshore Energy - General, tagged , , , , , , , , , on June 5, 2026| 2 Comments »

Nothing tilts public opinion more than high gasoline prices, or worse yet shortages! Hence the 1975 legislation establishing the SPR, the massive SPR drawdown in 2022, and this year’s withdrawals.

Looking back to the halcyon days of the US offshore program, it was the gas lines in the 1970s that drove the remarkable and rather unlikely growth in the program during the Carter Administration (1977-1981). A few highlights from those four years:

  • 15 lease sales including 3 offshore Alaska, 3 in the Atlantic, and 1 offshore California
  • Drilling activity in all 4 regions: GoM, Pacific, Alaska, and Atlantic
  • Natural gas discovery in the Mid Atlantic (Hudson Canyon Unit)
  • North, Mid, and South Atlantic District offices for permitting and inspections
  • 5300 well starts including 97 in water depths > 1000′
  • 314 new platforms including Cognac, the world’s first platform in > 1000′ of water

Perhaps unthinkable today, the Governor of Massachusetts from 1979-1983, Ed King, was a strong supporter of offshore drilling. Absent that support, the exploratory drilling on Georges Bank would probably have never occurred. /s/ Nostalgic Old Man 😉

Read Full Post »

Federal oil and gas leasing: onshore program surges to the forefront

Posted in energy policy, Gulf of Mexico, tagged , , , , , , on May 26, 2026| Leave a Comment »

Delaware Basin sale parcels mostly in NM
Lea and Eddy counties, NM

The Federal onshore oil and gas program was always secondary to the offshore program, at least in the opinion of those of us who worked in the offshore program 😉. That was before the shale era revolutionized US energy production.

The onshore program is now free to flex 💪 following recent sale results, most notably last week’s impressive BLM New Mexico sale that featured the Delaware Basin. See the attachment for details.

The table below compares the last two Big Beautiful Gulf sales and the record 2008 Gulf of Mexico sale with the BLM NM sale. Most astonishing is the record $357,129 per acre bid for a single NM tract. Devon Energy, which exited the Gulf in 2010, was the mega-bidder acquiring 24 tracts for $2.6 billion! (Devon is still bogged down in the Hogan/Houchin decommissioning dispute in the Pacific, a case which should temper enthusiasm for relaxed lease assignment and financial assurance policies.)

The attractiveness of the Permian, Delaware, and similar onshore basins has been greatly enhanced by vastly improved drilling and well completion technology. The short lead times to first production are a big advantage relative to offshore development.

The total high bids for Gulf Sale 206, which dwarfed the BBG1 and 2 sales, are still a Federal oil and gas leasing record when converted to 2026 dollars, but the sale area was much larger than for the NM sale.

Saledatetracts bid onacres bid ontotal high bidshighest bid/acre
BLM NM5/20/20267433,529$4,007,609,288$357,129
BBG2 3/11/202625140,753$46,976,423$3,647.57
BBG1 12/10/20251811,023,526$300,425,222$3,227.79
2067/21/20086153,323,047$3,677,688,245
($5.7 million in
2026 dollars)		$18,333.47
($28,300 in 2026 dollars)
The royalty rate on Sale 206 leases is 18.75%, versus 12.5% for the other 3 sales.
Efficient Markets Spring 2026 BLM Lease Sale MaterialsDownload

Read Full Post »

Lease Sale BBG2 now two blocks smaller; “sweet spot” leases awarded

Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged , , , , , , , , on May 20, 2026| Leave a Comment »

BBG2 – Big Beautiful Gulf, small lease sale

BOEM has completed their Sale BBG2 bid evaluations, and 2 of the 25 high bids were rejected, further shrinking the sale’s already small footprint. That’s a high rejection rate when compared with Sale BBG1 (3 of 181 bids rejected).

Although BOEM’s decision matrix has not yet been posted, a comparison of the acceptances with the bids submitted tells us that the Keathley Canyon Block 828 ($1,101,202) and Atwater Valley Block 63 ($650,018) bids were rejected.

Both of the rejected bids were submitted by LLOG, partnering with 4 other companies on the Atwater Valley block. LLOG’s high bids on 3 other blocks were accepted, so their rejection rate was 40%. Interestingly, 2 of the 3 BBG1 rejected bids were also submitted by LLOG.

There is no shame in bid rejections, which are part of the legislated leasing process. Why pay more than you have to (or think a block is worth)? A bid rejection may attract future competition, but otherwise the only downside is that you don’t get a lease that you can possibly acquire at another sale if desired (an advantage of regular, predictable lease sales).

BOEM is charged with making fair market value determinations and their process and decisions are publicly available. Of course, opinions differ on the value of an unexplored lease. We will see what the bidding on the BBG1 and BBG2 rejections looks like in future sales.

BOEM did accept the the high bids for the BBG2 “sweet spot” blocks (red in map below; also see the table) in the Green Canyon Area of the Gulf. These 4 blocks accounted for 17 of the sale’s 38 bids (45%) and $32.8 milion of the sale’s $47 million in high bids (70%). BP’s $21 million bid for GC 404 was by far the sale’s highest bid.

red=blocks receiving bids at BBG2; blue=BBG1 and Sale 261 leases; green=active leases issued prior to Sale 261
Green Canyon
Block No.		No. of biddersHigh BidderBid
4045BP$21,009,990
4052BP$885,990
4485Chevron$4,967,067
4925Chevron$5,887,188

Read Full Post »

Upon further review, 2019 retains the Gulf oil production record. Jump in California OCS production upcoming.

Posted in California, Gulf of Mexico, Offshore Energy - General, tagged , , , , on May 4, 2026| Leave a Comment »

Update: Another EIA revision to Gulf of America oil production for Dec. 2025 (1.994 to 1.985 million bopd) means that 2019 retains the production record by the narrowest of margins – 1.898 to 1.897 million bopd. Stay tuned because this may not be the final word 😉.

Per EIA, Feb. 2026 production dipped a bit to 1.931 million bopd (chart below).

Meanwhile, California OCS oil production for FEB continued at about 10,000 bopd. This number may increase a bit for March, and more for April data when the first Sable sales are included. A big increase, by as much as 500%, should be apparent in the June report barring a court ordered shutdown.

Read Full Post »

“Back to the Future”- 1947 Oil and Gas is the Gulf’s newest operator

Posted in Offshore Energy - General, Regulation, Gulf of Mexico, tagged , , , , , , , , , , on April 22, 2026| Leave a Comment »

1947 Oil and Gas is a great name choice given that the first offshore oil well beyond the sight of land was completed in 1947 (see photo). The numeric name choice is reminiscent of historically important team names like the San Francisco 49ers and the Philadelphia 76ers.

The name is especially fitting given that 1947’s first acquisition, Renaissance Offshore, operates entirely on the Gulf shelf (map below). Renaissance is a significant shelf producer ranking 19th among all Gulf operators in both oil (791,572 bbls) and gas (1,335,009 mcf) production in 2025. Renaissance ranked 6th in oil production and 7th in gas production among companies that focus on the shelf.

A challenge for 1947 will be improving Renaissance’s compliance and safety record:

  • In 2025, Renaissance was one of only four companies that operated more than 10 shelf platforms and had INC/facility inspection ratios >1.0.
  • Renaissance has averaged 0.93 violations (INCs) per inspection since 1/1/2020, trailing only Cox legacy Array in INC frequency.
  • In 2019, a worker fell to his death at the Renaissance Eugene Island 331 B platform. BSEE’s investigation found that Renaissance failed to maintain all of its walking and working surfaces in a safe condition, that supervisors failed to promptly correct or prevent employees from accessing the uncorrected and uncontrolled walking and working surface hazard area, and that Renaissance and its contractors failed to follow the agreed upon terms and conditions within their respective Safety and Environmental Management Systems (SEMS) bridging arrangements. (Renaissance incurred a seemingly modest $105,292 civil penalty for this incident. There is no public information on any settlement with the victim’s family.)

“Between 2012 and 2014 Renaissance grew substantially with the acquisition of sixteen Gulf of Mexico producing fields, fifteen of which are operated and most are 100% owned.” 1947’s financial strength is unclear. Hopefully, BOEM will verify that satisfactory decommissioning financial assurance arrangements are in place before any lease assignments are approved.

Renaissance operations being acquired by 1947 Oil and Gas

Read Full Post »

2019 vs. 2025 Gulf oil production: dead heat

Posted in Offshore Energy - General, California, Gulf of Mexico, tagged , , , , , , , , on April 6, 2026| Leave a Comment »

The EIA has revised Gulf of America oil production slightly downward for Nov. and Dec. such that we now have an absolute dead heat between 2025 and 2019. Production for both years averaged exactly 1.898 million bbls/day.

Because of the ~6 month lag in obtaining verified OCS production data from the Office of Natural Resources Revenue (ONRR), the monthly EIA reports are based on ONRR’s more timely sales of production data. The final sales and production numbers are typically very close. For the 2019 record OCS production year, both the EIA and ONRR report identical Gulf production of 1.898 million bopd.

Meanwhile, 2026 Gulf production (chart below) is off to a strong start – 2.019 million bopd in January. This is the third highest monthly oil production in the history of Gulf operations.

Finally, California OCS oil production, which has been hobbling along at ~10,000 bopd (2nd chart) will see a massive increase of up to 500% should Santa Ynez Unit production continue.

Read Full Post »

Sale BBG1 bidding outcomes: rejections, close calls, differences in valuations, and other interesting outcomes

Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged , , , , , on April 2, 2026| Leave a Comment »

Companies seeking to acquire OCS leases are not only competing with each other, they are also competing with BOEM’s tract evaluations. In that regard, the bidders fared well at Sale BBG1. Only 3 of the 181 high bids were rejected by BOEM. and those rejections appear to be warranted.

The rejected bids were significantly below both BOEM’s Mean of the Range-of-Value and Lower Bound Confidence Interval for these single bid tracts (table below).

Block No.Companyno. of bidsbidMROVLBCI
EW 921LLOG1$505,777$2,900,000$2,200,000
MC 587KUSA1$700,000 $3,300,000$2,200,000
MC 588LLOG1$613,008$6,100,000$4,600,000
MROV=Mean of the Range-of-Value; LBCI=Lower Bound Confidence Interval; KUSA=Karoon (Australia) Energy USA; EW=Ewing Bank; MC=Mississippi Canyon

LLOG submitted 9 other high bids (alone or with partners) that were accepted. KUSA did not submit any other bids. We’ll see if the rejected bids for these blocks are exceeded in future sales.

Nine other high bids (table below) were less than the MROV, but all were greater than the LBCI. Those bidders “beat the house,” acquiring leases for <MROV. In that regard, Equinor led the pack with no rejections even though 3 of their 7 bids were below MROV. Similarly, 2 of Beacon’s 4 bids were <MROV, with no rejections.

Block No.Companyno. of bidsbidMROVLBCI
GC 345Beacon1$5,302,358$5,400,000$4,200,000
GC 346Beacon1$1,102,358$1,500,000$900,000
GC 547Equinor1$3,200,067$4,500,000$2,600,000
GC 549Equinor1$899,967$1,500,000$576,000
AT 64LLOG1$7,997,018$8,300,000$6,700.000
KC 386Oxy2$3,000,505$3,500,000$2,800,000
KC 429Oxy1$600,505$910,000$470,000
KC 431Woodside1$904,547$1,200,000$840,000
WR 56Equinor1$904,547$1,200,000$576,000
MROV=Mean of the Range-of-Value; LBCI=Lower Bound Confidence Interval; AT=Atwater Valley, GC=Green Canyon, KC=Keathley Canyon, WR=Walker Ridge

Perhaps most interesting were the blocks that were highly valued by industry, but not by BOEM. Each of these blocks (table below) received multiple bids and high bids >$10 million. Conversely, BOEM valued the blocks at only $576,000, which (per the terms of the sale) equates to the minimum acceptable bid of $100/acre.

Block No.high bidderhigh bidother bidsMROV
GC 845Beacon$11,802,358LLOG: $613,008$576,000
KC 25Chevron$18,592,086BP: $11,507,770
Shell: $753,029		$576,000
WR 443Woodside$15,204,547Chevron $1,596,189$576,000
WR444Woodside$12,204,547BP: $4,593,770
Chevron $1,482,378		$576,000
MROV=Mean of the Range-of-Value; LBCI=Lower Bound Confidence Interval; GC=Green Canyon, KC=Keathley Canyon, WR=Walker Ridge


All of this demonstrates yet again that:

  • the govt is leasing exploration and development opportunities, not confirmed resources,
  • commercial discoveries are far from certain,
  • informed assessments differ (I.e. great minds, and their computers, don’t always think alike 😀),
  • corporate priorities differ, and
  • exploration strategies evolve.

Superstition, tactic, AI, coded or subliminal message? 😉

  • All 58 BP bids end with 770. Examples: $1,707,770 and $807,770. (At Sale BBG2, all 5 BP bids ended with 990.)
  • All 18 Shell bids ended with 029. (At Sale BBG2, all 6 Shell bids ended with 240.)
  • 13 of 15 Anadarko bids ended with 505, the other 2 ended with 101.
  • All 9 Woodside bids ended with 547.
  • All 3 Eni bids ended with 001.
  • All 4 Arena bids ended with 912.
  • All 12 Talos bids ended with 986.
  • All 3 Beacon bids ended with 358.

Read Full Post »

“God Squad”exempts Gulf oil and gas operations from Endangered Species Act

Posted in energy policy, Gulf of Mexico, Offshore Energy - General, Regulation, tagged , , , , , on April 1, 2026| Leave a Comment »

The ESA, which was enacted with good intentions, has perhaps been most effective in blocking, delaying, or complicating energy development. In the Gulf of America, the primary species in recent ESA battles has been the Rice’s whale.

While this blog was focused on the Santa Ynez Unit drama, a major ESA policy maneuver for the Gulf of America was in the works.

A provision of the ESA authorizes an Endangered Species Committee, known to critics as the “God Squad,” to grant exemptions to ESA requirements. The Committee is comprised of the Secretary of the Interior (chair), the Secretary of Agriculture, the Secretary of the Army, the Chairman of the Council of Economic Advisors, the Administrator of the Environmental Protection Agency, and the Administrator of the National Oceanic and Atmospheric Administration.

Yesterday, the Committee met (notice attached) and agreed to exempt Gulf oil and gas operations from the Endangered Species Act.

Knowing the swings in the political pendulum, provisions for reversing this decision warrant attention. The applicable language from the statute is pasted below:

16 U.S. Code § 1536 (h)(2)

(B) An exemption shall be permanent under subparagraph (A) unless—

(i) the Secretary finds, based on the best scientific and commercial data available, that such exemption would result in the extinction of a species that was not the subject of consultation under subsection (a)(2) or was not identified in any biological assessment conducted under subsection (c), and

(ii) the Committee determines within 60 days after the date of the Secretary’s finding that the exemption should not be permanent.

So, barring legislation, the exemption would seem to be difficult to overturn.

Earthjustice is vowing to “go to court to stop this illegal order.”

ESA CommitteeDownload

Read Full Post »

BBG2 – historically weak Gulf-wide lease sale

Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged , , , , , , on March 11, 2026| Leave a Comment »

Although no one was expecting a barnburner only 3 months after the previous sale, BBG2 was historically weak for a Gulf-wide sale. The table below compares BBG2 with the previous 4 Gulf sales, none of which were particularly impressive.

However, the sale was not without highlights. There was some spirited bidding for tracts in the Green Canyon area. BP’s bid was the highest of 5 for GC Block 404. BP bid $21 million for the block, 45% of the high bids sum for the entire sale. The BP bid was also $20 million higher than the next highest bid for that tract (ouch!).

Also interesting was Chevron edging Shell $5,887,188.00 to $5,501,240.00 to acquire GC Block 492.

Sale No.257259261BBG1BBG2
date11/17/20213/29/202312/20/202312/10/20253/11/2026
companies
participating		3332263013
total bids22332842316121938
tracts receiving bids21432442275118125
sum of all bids
$millions		198.5309.8441.9371.969.9
sum of high bids
($millions)		101.7263.8382.2279.447.0
highest bid
company
block		$10,001,252
Anadarko
AC 259		$15,911,947
Chevron
KC 96		$25,500,085
Anadarko
MC 389		$18,592,086
Chevron
KC 25		$21,009,990
bp
GC 404
most high bids
company
sum ($millions)		46
bp
29.0		75
Chevron
108.0		65
Shell
69.0		50
bp
61.0		6
Anadarko (Oxy)
4.0
sum of high bids ($millions)
company		47.1
Chevron		108
Chevron		88.3
Hess		61.0
bp		22.6
bp
most high bids by independent14-DG Expl.13-Beacon
13-Red Willow		22-Red Willow14-Murphy5-LLOG
1excludes 36 leases improperly acquired for carbon disposal purposes; 2excludes 69 leases improperly acquired for carbon disposal purposes; 3excludes 94 leases improperly acquired for carbon disposal purposes

For historical comparison purposes, Gulf Sale 206 drew $3.7 billion ($5.6 billion in today’s dollars) in 2008. Twenty-siz sales between 1972 and 2013 garnered more than $1 billion in high bids.

Sale stats

Read Full Post »

Lease Sale BBG1 bid evaluation update; 2 more lease sales upcoming

Posted in Alaska, energy policy, Gulf of Mexico, Offshore Energy - General, tagged , , , , , , , , on February 11, 2026| Leave a Comment »

Tracts receiving bids in Sale BBG1

To date,BOEM has deemed 96 of the 181 BBG1 high bids to be acceptable. No high bids have been rejected. Although the sale was “beautiful but not big,” the bids were relatively strong on a per acre basis. The number of rejected bids may thus be quite low.

No bids were accepted during BBG1’s Phase 1 review. This means that none of the tracts receiving bids were determined to be nonviable as was the case for the 199 tracts that were improperly acquired for carbon disposal purposes in Sales 257, 259, and 261. (Unsurprisingly, neither of the acquiring companies has submitted an exploration plan for any of these CCS leases. The leases will likely expire without activity. Much to the dismay of the large and diverse group of opponents, the carbon disposal industry is focusing on onshore locations along the Gulf Coast.)

Meanwhile, a Cook Inlet lease sale is scheduled for March 4, and another Gulf of America sale will be held on March 11. Despite attractive terms, don’t expect either to be a banner “red jacket” lease sale. (See the John Rankin recognition below.)

More information on BOEM’s bid evaluation process.

Read Full Post »

Older Posts »