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. | Company | no. of bids | bid | MROV | LBCI |
| EW 921 | LLOG | 1 | $505,777 | $2,900,000 | $2,200,000 |
| MC 587 | KUSA | 1 | $700,000 | $3,300,000 | $2,200,000 |
| MC 588 | LLOG | 1 | $613,008 | $6,100,000 | $4,600,000 |
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 |
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 |
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.
Bud's Offshore Energy (BOE) 