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Energy News Beat Publishers Note: Its better to have leases than not ….
W&T Offshore, Inc. WTI claimed to be the apparent high bidder on two blocks in the U.S. Gulf of Mexico lease sale 256. The region’s offshore lease sale was conducted on Nov 18 by the Bureau of Ocean Energy Management (“BOEM”) under the Trump presidency.
The two apparent bids were on Eugene Island South Addition block 389 and Ewing Banks block 979 on the Gulf of Mexico. The two shallow-water blocks spread over 8,800 acres. Notably, the drive came as the offshore oil companies expect to face restrictions related to drilling on federal lands under the incoming Biden administration.
Upon approval, the independent oil and natural gas producer’s combined investment on both blocks is expected to be approximately $518,000, reflecting a 100% working interest on the property.
Notably, the Houston-based upstream firm hopes to receive the final award results within the next three months as the BOEM restrained from granting the lease currently on the basis of their minimum bidding criteria. When approved, the upstream company shall enjoy a five-year lease period for the two shallow-water blocks and pay a 12.5% royalty.
The offshore company is reluctant to miss the chance of securing the two blocks since the window of opportunities become limited for the future as the incoming administration might impose new drilling regulations. In other words, given the current uncertain times, owing to the coronavirus pandemic, the circumstances did not seem to suppress operator enthusiasm, while acquiring the Gulf of Mexico acreage during the lease sale.
Headquartered in Houston, TX, W&T Offshore is a leading upstream energy company. However, its shares have underperformed the industry in the past month. The company’s stock has gained 43.9% compared with the industry’s 44.5% growth.
