The Buckskin field (LLOG) is located in Keathley Canyon blocks 785, 828, 829, 830, 871, and 872 in 6,800 ft (2,073 m) of water. The KC 828 lease expired last year and LLOG’s bid for that block at the BBG2 sale was rejected.
BOEM’s Decision Information Matrix for Sale BBG2 is attached. As previously noted, 2 of the 25 high bids were rejected: Keathley Canyon Block 828 ($1,101,202) and Atwater Valley Block 63 ($650,018).
MROV=Mean of the Range-of-Value; LBCI=Lower Bound Confidence Interval
In the case of Keathley Canyon 828, BOEM’s valuation is more than 20 times the high bid. BOEM valued this block far higher than any other block in the sale.
KC 828 had been previously leased and that lease expired on 9/3/2025. The lease block was part of LLOG’s Buckskin field. Apparently, the lease expired due to inactivity given that the last well reached total depth more than a year prior to the expiration date. LLOG wanted the lease back. BOEM’s rejection sends a message that the price went up (by a lot 😉).
Finally, why didn’t any other company bid on KC 828, a block that has been publicly reported as being part of the Buckskin field?
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.
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.
Company
no. of bids
bid
MROV
LBCI
GC 345
Beacon
1
$5,302,358
$5,400,000
$4,200,000
GC 346
Beacon
1
$1,102,358
$1,500,000
$900,000
GC 547
Equinor
1
$3,200,067
$4,500,000
$2,600,000
GC 549
Equinor
1
$899,967
$1,500,000
$576,000
AT 64
LLOG
1
$7,997,018
$8,300,000
$6,700.000
KC 386
Oxy
2
$3,000,505
$3,500,000
$2,800,000
KC 429
Oxy
1
$600,505
$910,000
$470,000
KC 431
Woodside
1
$904,547
$1,200,000
$840,000
WR 56
Equinor
1
$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 bidder
high bid
other bids
MROV
GC 845
Beacon
$11,802,358
LLOG: $613,008
$576,000
KC 25
Chevron
$18,592,086
BP: $11,507,770 Shell: $753,029
$576,000
WR 443
Woodside
$15,204,547
Chevron $1,596,189
$576,000
WR444
Woodside
$12,204,547
BP: $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.
Bud's Offshore Energy (BOE) 