Lease Sale Research Articles

Use of satellite telemetry to evaluate movements of caribou within subsistence hunting areas in northern Alaska

Caribou from the Teshekpuk Herd (TH) are an important subsistence resource for residents of Inupiaq villages in northern Alaska. In recent years the use of satellite telemetry has increased the understanding of the herd's annual movements and interactions with other herds. Most caribou of the TH are within the National Petroleum Reserve—Alaska (NPRA) throughout the year. The northeastern portion of NPRA has undergone two lease sales for oil and gas exploration, and lease sales are tentatively scheduled for the central/northwest portion of the NPRA in 2004. During 1990—1999, the movements of 27 caribou from the TH were tracked using satellite collars. We evaluated the proportion of time caribou were available to Inupiaq hunters by incorporating maps depicting subsistence-use areas for each of seven Inupiaq villages, and then examining seasonal and annual movements of caribou relative to those areas. By combining caribou locations with subsistence hunting areas, we were able to explore spatial and temporal patterns in caribou availability to subsistence hunters. This information is useful for managers to set appropriate hunting regulations and for devising sensible alternatives and mitigation of likely petroleum development in NPRA.

Prestack depth imaging in the eastern Gulf of Mexico, Part 2: Interpretation of the Mid-Cretaceous sequence boundary and underlying geologic events

The DeSoto Canyon and Lloyd Ridge Outer Continental Shelf (OCS) lease areas (Figure 1) comprise one of the few remaining frontier exploration regions in North America. To date, no wells have been drilled in the deepwater portion of the eastern Gulf of Mexico, and only one well has been drilled on the shelf (DeSoto Canyon 512, Shell). In preparation for OCS Lease Sale 181 in December 2001, a large quantity of 2-D seismic data with a total offset range of 7900 m has recently been acquired in the eastern Gulf of Mexico. We have applied prestack depth migration to 3270 miles of seismic data from the DeSoto Canyon and Lloyd Ridge lease areas in order to better image the geology of the region. Water depths in the study area vary from 900 m on the west Florida shelf to 3000 m on the abyssal plain of the west Florida basin. The mid-Cretaceous sequence boundary (MCSB) forms the most prominent feature in the seismic data. Mapping this surface is the key to understanding the structural geology and potential hydrocarbon traps in the region. Figure 1. MMS lease areas, region of Lease Sale 181, and the study area. Viosca Knoll Lease Area = VK. Main Pass Lease Area = MP. This region is highly prospective for hydrocarbon exploration because of the presence of known source rocks and geologic similarity to regions with large hydrocarbon reserves farther west (Watkins and Buffler, 1996). Previous exploration has concentrated on better known areas to the west and to the north where wells are tied to the seismic data (Denman and Adamick, 2000). Discoveries such as Coulomb and Aconcagua have been made just outside the study area in the Mississippi Canyon lease area. We show that many untested structures exist in this region, some with distinct amplitude anomalies that …

Prestack depth imaging in the eastern Gulf of Mexico

The Gulf of Mexico (GOM) shelf is one of the most thoroughly explored regions in the world. As downstream technology has advanced, exploration and production of hydrocarbons have progressively moved into waters greater than 3500 ft in the central GOM. On the other hand, the eastern GOM is largely underexplored. It is now attracting industry attention because the Minerals Management Service of the U.S. Deparment of the Interior has scheduled OCS Lease Sale 181 for December 2001. Previous investigations of the eastern GOM structural geology (e.g., Wu, 1990; DeBalko and Buffler, 1992; Dobson and Buffler, 1997) were based on 2-D time-processed seismic data with no tying well information. Approximately 3270 miles of 2-D seismic data were recently gathered over the Lloyd Ridge and DeSoto Canyon areas to evaluate the region's hydrocarbon potential for the upcoming lease sale (Figure 1). Most data were acquired in the deepwater Florida basin, but a small portion overlapped the basin/shelf boundary and the outermost portions of the Florida shelf. The region is geologically complex. It contains interbedded salt, a history of vertical and lateral salt movements, and the juxtaposition of dramatically varying lithology and velocity across the steep shelf slope feature known as the Florida Escarpment. Figure 1. Map of study area. Test line in red. The geologic and geophysical complexity of this area, limited previous exploration activity, and lack of well data present many challenges to developing an accurate image and understanding of the region. Due to the subsurface complexity, interpretation remains ambiguous, even when using these recent time data, because prestack depth migration (PSDM) has been shown to provide superior subsurface imaging in other parts of the GOM (Willacy, 1999). The authors elected to evaluate its effectiveness on these new data. If the test were to prove successful, depth imaging across the lease area might …

ABSTRACT: An Update on Sale 181

Abstract OCS Sale 181 in the Eastern Gulf of Mexico is the first oil and gas lease sale in this area in thirteen years. The area being considered for inclusion in the sale and potential restrictions and stipulations on industry activities (such as no surface occupancy) will be reviewed as will the status of the sale. End_of_Record - Last_Page 109-------

Multidisciplinary teams in exploration and production: Their value and future, Part 1, Concepts, definition and team successes

Teams and teamwork are not new in the oil and gas business. In the 1950s through 1970s, teams were used in both large and medium‐size companies for some large projects. Teams were used for projects such as lease sales, appraisal of large discoveries, and initiation of secondary recovery ventures. The proliferation of teams in the mid-1980s was in response to both financial and technological reasons. The low oil and gas prices in the mid-1980s through most of the 1990s dictated that companies lower costs and do more work with fewer people. At the same time, the explosion of new technology such as 3-D and 4-D seismic, reservoir simulation, and a host of drilling innovations created the need for technical staff from several geoscience and engineering disciplines to work together.

A Subsalt Prospect in Offshore Louisiana - Evolution of a Prospect from Lease Sale to Present: ABSTRACT

A Subsalt Prospect in Offshore Louisiana - Evolution of a Prospect from Lease Sale to Present: ABSTRACT

Petroleum Exploration and the Atlantic OCS

The largest Atlantic outer continental shelf (OCS) lease sale was the first one, Sale 40 in 1976. Ninety-three Baltimore Canyon Trough petroleum leases were issued, and industry's winning bids total $1.1 billion. The highest bonus bids were for leases overlying the Schlee Dome, then called Great Stone Dome, a large structure with a very large fetch area. By 1981, seven dry wells on the dome moderated this initial flush of optimism. However, subeconomic quantities of gas and light oil were discovered on the nearby Hudson Canyon Block 598-642 structure. Now after 9 lease sales, 410 lease awards, and 46 exploration wells, United States Atlantic petroleum exploration activity is in a hiatus. Fifty-three leases remain active under suspensions of operation. Twenty-one lease blocks, about 50 mi offshore from Cape Hatteras, have been combined as the Manteo Exploration Unit. Mobil and partners submitted an exploration plant for the unit in 1989. The Atlantic OCS has petroleum potential, especially for gas. With only 46 exploration wells, entire basins and plays remain untested. During the present exploration inactivity, some petroleum evaluation of the Atlantic OCS continues by the Minerals Management Service and others. Similarities and differences are being documented between United States basins andmore » the Canadian Scotian Basin, which contains oil and gas in commercial quantities. Other initiatives include geochemical, thermal history, seismic stratigraphic, and petroleum system modeling studies. The gas-prone Atlantic OCS eventually may make an energy contribution, especially to nearby East Coast markets.« less

West Delta Block 35: Rediscovery of a 23-Year-Old Field

ABSTRACT The Federal leases on the continental shelf, offshore Gulf of Mexico, are in a mature state of development. Many fields are reaching their productive and/or economic limits as defined by their operators, and are being released. This results in excellent opportunities for independents who recognize the importance of modern technology and apply it to their evaluation process. West Delta Block 35 was originally divided into two leases. The southern 3/4 block lease was released in 1991 having produced 92.3 Bcf and 3.5 MMBL since 1970. The northern 1/4 block lease was released in 1983 having produced 64.3 Bcf and .25 MMBL since 1974. The northern 1/4 was subsequently leased in 1985 and expired in 1991 with no activity having transpired. The north 1/4 and the southern 3/4 were combined and the entire block was available at the 1992 lease sale. The West Delta 35 block was evaluated utilizing the following methods: History (leases, companies involved, and changing economic conditions) Well records (production, tests, recompletions, previous permits, and related activity) Geological evaluation Correlation Analysis utilizing PC - based software with user - defined saturation equations and multiple models to determine hydrocarbon bearing zones Integration with all other available data (Pressure data, sand parameters, volumetrics, etc.) Seismic Evaluation Integration with well log data Interpretation utilizing workstation technology Seismic modeling utilizing well data It was determined that significant reserves remained in an updip position on the north 1/4 of the block in two reservoirs with an additional reservoir having been penetrated but never produced. Additional potential was also recognized on the southern portion of the block. The lease was acquired in the 1992 lease sale and the northern prospect drilled in late 1992 and early 1993. The well found pay in three sands. Two were tested (prior to acidization) for a combined rate of 12.8 MMCFD with the well still cleaning up. The well proved up significant reserves in two previously produced reservoirs.

Arctic offshore potential

The United States oil industry is not running out of ideas. However, to find something significant, it is driven to search in the arctic offshore. The Minerals Management Service (MMS) is under pressure to cut back on Outer Continental Shelf acreage in upcoming lease sales. Exploration is prohibited in whole sections of the country. Today, though much of the OCS is relatively unexplored, it appears that the US is running out of new places to search.

Development and Use of a Modeling System to Aid a Major Oil Company in Allocating Bidding Capital

Bidding at U.S. offshore oil and gas lease sales is characterized by high stakes, enormous uncertainties, and many interrelated decisions. The Lease Bidding Strategy System combined techniques from decision analysis, statistics, and nonlinear optimization to provide information and insights to management responsible for bidding at Gulf Oil Corporation. It was used prior to every major federal lease sale from September 1980 until Gulf was acquired in 1984, during which time Gulf's bids exceeded $1.5 billion. This paper describes the evolution and use of this system, emphasizing its impact on the organization. It describes efforts that gained acceptance for this system under difficult circumstances, and illustrates the importance of adapting methodology to problem changes over time. To our knowledge, this is the first public documentation of the long-term use by a major oil company of a system for constrained multiblock optimization of its bids and partnership shares at U.S. offshore lease sales.

Ocean policy development in the state of Washington

Abstract Washington's recent history in ocean policy development started in 1967 when the state's Oceanographic Commission was established. The commission was disbanded in 1982 when the state's interests in ocean policy were at a low point. This lack of interest changed rapidly after 1986 when a federal OCS lease sale was announced. Since then several new organizations have been created and a 1989 law established preliminary ocean policies for the state. The state needs a broad‐based task force to establish better linkages among a variety of ocean policy players. Also, the 1989 statute should be revisited and made more specific.

The Effect of Regret on Optimal Bidding in Auctions

While most models of auctions and competitive bidding assume that each bidder's utility for an outcome depends only on his own profit, we allow the utility to also depend on any regret that a bidder suffers after the fact and characterize when and how this affects bidding. Specifically, a winner might regret “money left on the table” in Federal offshore oil lease sales, while a loser might regret seeing an object sell for less than his own value for it. We show that for risk-neutral bidders who, after the fact, know the winner's price for the object, a bidder's optimal bidding strategy will not depend on the relative weight given to profit versus regret if both forms of regret weigh equally heavily. However, if bidders weight money-left-on-the-table regret more heavily, then the bid taker suffers. Likewise, if losers do not learn the winner's price, then the bid taker also suffers. Thus, the existing models' exclusion of regret from risk neutral bidders' utility functions affects the applicability of the resulting theory under certain, now clearly delineated, conditions.

Oil and Gas Developments in Alaska in 1988

Six wildcats were completed or suspended and 6 federal and state lease sales were held in Alaska in 1988. The primary areas of interest continued to be the North Slope and the Beaufort Sea. Cook Inlet had a resurgence of exploration activity in 1988. The Bering Sea has held little interest since the last wells were drilled in 1985, except for the opening of bids in the long delayed North Aleutian Sale 92. Exploration in the Beaufort Sea has shifted to the east with the drilling of 2 wells. Onshore exploration continued to be confined to the central North Slope with the drilling of 2 wildcats. Cook Inlet drilling comprised the remaining wildcat activity. Three federal OCS sales were held in 1988. The first, Beaufort Sea Sale 97, was the third area-wide sale. The Chukchi Sea Sale 109 was a first offering and the last of the offshore frontier areas to be offered for leasing. The third lease sale, in the North Aleutian Planning Area, was held over from 1986 as litigation against the sale was finally resolved. Three state lease sales were held, one of which was the highly controversial Demarcation Point Sale 55 in state waters adjacent to the Arctic National Wildlife Refuge and the Chevron 1 Jago River (KIC) well. The other state sales were conducted on acreage around the Prudhoe Bay-Kuparuk area.

Oil and Gas Developments in Louisiana Gulf Coast Offshore in 1988

A total of 800 wells was drilled in offshore Louisiana in 1988 compared to 632 wells in 1987. The overall success rate for 1988 decreased to 54%; the success rate for new-field wildcats decreased to 31.4%. Drilling of other exploratory wells increased by about 34% and had a success rate of 54%. Twenty-nine drilling platforms were installed, a 45% increase. Geophysical activity was up 16.5% to 846.5 crew-weeks. A record 931 bids were submitted in the Gulf of Mexico OCS Lease Sale 113. High bids totaled $404,612,164. Continued interest in deep water tracts (deeper than 3,000 ft) was indicated by the 287 bids (31%) submitted. In 1988, total liquids production declined 16% to 272 million bbl. Gas production declined 3% to 3.4 tcf.

Implications for coastal managers of hard mineral development in the U.S. exclusive Economic Zone

Abstract Marine hard minerals have been termed “the new ocean frontier.”; Minimal market potential and industry interest in these minerals have placed a significant constraint on their future development. With the exception of sand and gravel and some placer deposits, the development of marine hard minerals is not likely to occur until the next century. Despite these uncertain prospects, the federal government has placed a priority goal on the development of the mineral resources in the Exclusive Economic Zone (EEZ), and the Minerals Management Service has proposed lease sales in areas surrounding the Hawaiian and Johnston Islands. Coastal managers should be aware that the potential development of hard mineral mining may result in both negative and positive impacts to the coastal zone. Some of these impacts have been discussed in the draft Environmental Impact Statement prepared for these proposed lease sales. A clear regulatory framework for the exploration and development of these minerals is not yet in...

Oil and Gas Developments in Louisiana Gulf Coast Offshore in 1987

During 1987, a total of 632 wells were drilled in offshore Louisiana, a decrease of 40 wells from 1986. The overall success rate increased slightly from 57% in 1986 to 60% in 1987. The success rate for new-field wildcats increased to 37% from 24% in 1986 with about the same number of wells drilled. The number of other exploratory wells increased by about 51%, with nearly the same success rate (50%) as in 1986. The number of drilling platforms installed increased 100% compared with the sharp decline in 1986. Geophysical activity increased 39% from 1986 to 726.5 crew-weeks. Federal OCS Lease Sale 110, held April 22, 1987, signaled a recovery in Gulf of Mexico exploration activity. Fifty-one companies exposed a total $341,540,856 in bids for 313 tracts. The government accepted bids on 293 tracts for a total of $262,971,486. Liquids production during 1987 decreased 2% to 324 million bbl. Gas production increased 13% to 3,469 bcf from 1986 levels.

Lease delay rights: Market valued permits and offshore leasing

Sealed bid auctions for offshore federal mineral holdings are a source of substantial litigation brought by environmental groups and the states against the US government. A basic utility maximizing model and explanations based on externalities and wealth seeking behaviour are used to predict a willingness to pay by interest groups to delay a lease on specific tracts. A method is developed that incorporates bids for delay into the auction process. Estimates of the minimum payment to delay a lease, based on data from two lease sales, are compared to the budget of selected environmental groups, states and local governments.

Permitting California Outer Continental Shelf Petroleum Development Projects

Summary. Permitting California Outer Continental Shelf (OCS) development activities is a costly, time-consuming, and complex process. Because both federal acreage and California state acreage are involved in offshore development and associated onshore facilities, both federal and state environmental and permitting requirements must be met. Literally years of review by numerous regulatory agencies are required before the project may proceed. Delays and expenses generated by the permitting process adversely proceed. Delays and expenses generated by the permitting process adversely affect project economics. The need for large amounts of technical information early in the process alters the normal evolution of project design. Finally, restrictions and constraints imposed by regulatory agencies affect all aspects of the project and ultimately determine project viability. Introduction California's populace consistently expresses a strong concern for protection of the environment. This concern manifests itself in the form of state and local laws designed to manage and to reduce the environmental effects of development of any kind, including oil development. In the exploratory phase of lease operations resulting from Pacific OCS Lease Sales 68 and 53, permitting problems were minimal. This relative ease of permitting problems were minimal. This relative ease of permitting resulted because exploratory operations occurred almost exclusively on federal land; thus state agencies had limited influence regarding these activities. As exploration leads to discoveries, and ultimately to development, state and local governments enter the picture, vastly compounding permitting difficulties. permitting difficulties. The California OCS permitting process is continually evolving to accommodate public pressure and political realities. The level of time, effort, and expense required to permit an OCS development project, along with the restrictions accompanying such permits, is now viewed as a major constraint to OCS development in California waters. Current permitting procedures, along with some of the problems this process creates, are outlined. ThePermitting Process OCS development activities where onshore facilities are a part of the development require the approval of various federal, state, and local government authorities before the development project may proceed. Two separate but substantially similar laws govern the major portion of environmental review of OCS projects: the Natl. Environmental Policy Act (NEPA), which applies to the federal or OCS portion of the development; and the California Environmental Quality Act (CEQA), which governs development areas under the State of California's jurisdiction, including onshore and activities up to 3 miles [4.8 km] offshore. Both laws require that the government agency most directly responsible for regulating major development activities, the "lead agency," select an independent party to prepare an assessment of environmental impacts party to prepare an assessment of environmental impacts associated with the proposed project. NEPA refers to this assessment as an environmental impact statement (EIS), while CEQA calls the document an environmental impact report (EIR). Because OCS development includes both offshore (federal) and onshore (state) activities, both laws are triggered. In theory, two separate documents should be prepared by separate lead agencies; however, because all parties involved recognize the redundancy, interagency agreements have led to the creation of the Joint Review Panel (JRP) and the joint EIS/EIR. Panel (JRP) and the joint EIS/EIR. The JRP consists of representatives of the major permitting agencies involved in OCS development: the permitting agencies involved in OCS development: the Minerals Management Service (MMS), the State Lands Commission, the California Coastal Commission, and the county where the onshore activity (such as a processing facility) is proposed. The MMS acts as the NEPA lead agency, and the county acts as the CEQA lead agency; however, a single environmental review document, the EIS/EIR, is prepared to conform to the requirements of both laws. The JRP has control over the parameters of the environmental study and the adequacy of the produced document. Permitting authorities use this document to identify and to mitigate potential adverse environmental effects of the project, and ultimately to judge whether the project will be allowed to proceed. project will be allowed to proceed. Because OCS development activities tend to be proximate in both area (multilease-sized structures) and time proximate in both area (multilease-sized structures) and time (because most leases in a given area are usually sold in a single lease sale, exploration and production occur in a similar time period), the MMS has chosen to analyze all proposed and potential development activities in an area with a single "area-wide" document. This document has the advantage of considering potential cumulative impacts of all probable OCS development in a given area. An areawide EIS/EIR has been prepared for each of the last three major California OCS development areas-the southern, central, and northern Santa Maria basin areas. JPT P. 713

Oil and Gas Developments in Atlantic Coastal Plain and Outer Continental Shelf in 1985 and 1986

Exploratory drilling in the Atlantic coastal plain region increased in 1981. Eight wells were drilled, 5 of which were completed for a total footage of 71,439 ft (21,780 m). Four of the wells were located in the Baltimore Canyon Trough area and 4 were located in the Georges Bank basin. No exploratory wells were drilled in the Southeast Georgia Embayment or in the onshore portion of this region in 1981. The 5 completed wells were reported as dry holes. Two lease sales were held in 1981: OCS Lease Sale 56 drew bids on 47 tracts for a total of $342,766,174 in the South Atlantic and OCS Lease Sale 59 drew bids on 50 tracts for a total of $321,981,000 in the Mid-Atlantic. Geophysical activity provided a total of 24,470 line-mi (39,380 line-km) of seismic data.

Oil and Gas Developments in Louisiana Gulf Coast Offshore in 1986

In 1986, 672 wells were drilled in offshore Louisiana, a decrease of 302 wells from 1985. The overall success rate was 57.1%, a slight increase from the 56.2% success rate of 1985. The success rate for new-field wildcats increased to 24.4%, with 32 discoveries, down from 40 discoveries in 1985. New-pool and outpost drilling decreased by 36 wells from 1985 levels to 72 wells drilled. Of these, 38 new-pool or outpost discoveries were made, compared to 51 in 1985. At Federal Lease Sale 104 on April 30, 1986, $164.14 million was bid on 114 leases by 45 companies. The total of accepted winning bids on 101 tracts was $144.76 million. Geophysical activity fell 45.9% from 1985 to 522 crew-weeks. Liquids production increased almost 1% (to 330 million bbl) from 1985 levels, whereas gas production fell 9.2% (to 3,080 bcf).