Increased interest in the western Gulf of Mexico’s (GoM) deepwater blocks and transboundary area near the U.S.-Mexico border led to almost $110 million in high bids Aug. 20 during Western GoM Lease Sale 238 in New Orleans.

“Most of the interest is for the deepwater Lower Tertiary Trend,” Michael Celata, GoM deputy regional director for the U.S. Department of Interior’s Bureau of Ocean Energy Management (BOEM), said during a media teleconference. “Historically, this has been an area where companies have bid, and I think that trend continued with this sale.”

A total of 14 companies participated in the sale, placing 93 bids on 81 blocks spanning 433,822.05 acres, according to BOEM. The sale included 4,026 blocks up for bid spanning 21.6 million acres. High bids totaled $109.95 million with the sum of all bids totaling $135.46 million.

The sale garnered more participation than Western GoM Lease Sale 233 in August 2013, which saw $144.69 in total bids and $102.35 million in high bids. Overall, 12 companies participated in that sale, making 61 bids for 53 blocks.

Celata attributed the increased number of bids of this year’s sale to having a few more companies participate as well as the return of BP to the bidding process due to the lifting of sanctions initially placed on it following the Deepwater Horizon oil spill. BP proved to be the most active company in the sale, with 27 high bids and 31 total bids.

ConocoPhillips led participants in Lease Sale 238 with the highest bid, offering about $16.8 million for Alaminos Canyon Block 431. The company’s bid for the block also led as the highest bid per acre, which totaled $2,914.72. Other companies placing the top 10 single highest bids of the sale included Chevron U.S. Inc., BHP Billiton Petroleum (Deepwater) Inc., BP E&P Inc. and Shell Offshore Inc. All top 10 bids were made for Alaminos Canyon in the transboundary area. The Port Isabel section of the transboundary area also garnered significant interest, with Port Isabel Block 746 receiving the greatest number of bids.

Of blocks with bids, 29 are located in a water depth of 800 m to 1,600 m (2,625 ft to 5,249 ft) and 42 are located in a water depth greater than 1,600 m.

The National Ocean Industries Association (NOIA) in a press release said the lease saw healthy results and proved important in many aspects.

“Current federal policies allow sales on only about 13% of the Outer Continental Shelf, so every sale is important,” NOIA President Randall Luthi said in a press release. “Each sale shows a commitment by the U.S. to continue to provide the opportunity, however limited, to develop offshore oil and natural gas. Today’s sale also demonstrates the continued commitment of the U.S. oil and natural gas industry to invest hard-to-find exploration dollars in areas that have been sold and resold again.

“With so many other countries opening up new, promising areas, it is a testament to the oil and gas industry that so many have decided to try and keep jobs and investment here at home,” Luthi continued. “This sale allowed many of the smaller exploration and production companies to successfully compete for leases in both deep and shallow water, keeping a diversity vital to the overall energy and jobs portfolio of the U.S. Lastly, this sale also reaffirms the industry’s great interest in deepwater prospects in the transboundary area.”

Contact the author, Mary Hogan, at mhogan@hartenergy.com.

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