Final Notice of Sale announces lease terms for available acreage offshore Louisiana, Mississippi and Alabama – Lease Sale Number 247 is Mar. 22, 2017

Two days after President Obama used his pen to indefinitely ban most of the Arctic and some of the Atlantic to oil and gas drilling, the Bureau of Ocean Energy Management (BOEM) announced its Notice of Final Sale in the Gulf of Mexico for the last installment of the current five year lease plan which ends in 2017.

The GOM sale will include all available unleased areas in the Central Planning Area (CPA) managed by the BOEM, amounting to more than 48 million acres offshore Louisiana, Mississippi, and Alabama for oil and gas exploration and development, the agency said.

U.S. to offer 48 Million Acres in its Last Central Gulf of Mexico Oil & Gas Lease Sale

U.S. to offer 48 Million Acres in its Last Central Gulf of Mexico Oil & Gas Lease Sale. Source: BOEM

The previous 11 sales in the current five year plan brought in $3 billion to the U.S. Treasury from oil and gas companies.

Sale 247 includes approximately 9,118 blocks, located from three to about 230 miles offshore, in water depths ranging from nine feet to more than 11,115 feet (3 to 3,400 meters).

U.S. to offer 48 Million Acres in its Last Central Gulf of Mexico Oil & Gas Lease Sale

Map shows close view of some of the Gulf of Mexico blocks up for sale in the March 17, 2017, lease sale. Source: BOEM

All terms and conditions for Central Sale 247 are detailed in the Final Notice of Sale information package, which is available at: Copies of the FNOS maps can be requested from the Gulf of Mexico Region’s Public Information Unit at 1201 Elmwood Park Boulevard, New Orleans, LA 70123, or at 800-200-GULF (4853).

The Notice of Availability of the Final Notice of Sale will be available Dec. 23, 2016, for inspection in the Federal Register at: and will be published in the December 27, 2016 Federal Register.

BOEM will livestream Central Gulf of Mexico Lease Sale 247 on March 22, 2017.  The livestream broadcast will begin at 9 a.m. CST on the BOEM website at

New financial security requirements for all GOM leaseholders and operators are in force

U.S. to offer 48 Million Acres in its Last Central Gulf of Mexico Oil & Gas Lease SaleLast fall, BOEM released an adjustment of its rule effective Sept. 12, 2016. The “Notice to Lessees and Operators,” NTL No. 2016-N01 is a memo that was sent to operators and leaseholders in the Gulf. It revised prior NTL rules by eliminating certain financial exemptions related to decommissioning costs for joint leaseholders. The new NTL essentially says that every operator and lessee holding federal leases on the Gulf of Mexico OCS must prove it has the financial wherewithal or be able to supply supplemental security, bonding, Treasury Bonds or collateral to ensure the financial obligations for decommissioning of its wells, platforms, pipelines and the like can be met by every party in a lease. The result of this action could be financially devastating to small and medium-sized operators who for decades in the Gulf have leaned on the financial strength of a large operator-partner in their GOM leases.

In an interview this fall with Oil & Gas 360®, Robert Thibault, attorney with Haynes and Boone, discussed the significant financial burdens that the change in rule would bring to Gulf of Mexico operators and leaseholders and how he expects the entire GOM drilling landscape would change as a result of the rule change:

“From a lawyer’s perspective, I suspect the deep offshore portion of the market will look similar to today, where ultra-majors, majors and major independents continue to aggressively look for elephant fields – as their available CapEx allows under any given price structure.

“The shallow water segment and industry players below this initial level of well-financed activities will start to look substantially different, as there will be fewer financially capable buyers available and their buy-in prices and timing will be affected by security requirements both from the agencies and potentially the sellers themselves.

“I suspect that there will be many fewer ‘lower rung’ buyers who were the traditional clients for fully exploiting mature properties.  I also expect that the Federal agencies will move more quickly than they have historically to close out, decommission and remove idle iron.”

Final Notice of Sale 247 Package

The above details are from the BOEM website.

Permanent platform deepwater GOM operators

U.S. to offer 48 Million Acres in its Last Central Gulf of Mexico Oil & Gas Lease Sale

Gulf of Mexico permanent deepwater structures. Source: Bureau of Safety and Environmental Enforcement (BSEE), Dec. 1, 2016.

Legal Notice