Lease Sale Shows Shifting Winds in US Gulf

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Exxon Mobil’s aggressive play for what appears to be a large swath of offshore carbon sequestration acreage was the highlight of last week's lease sale in the US Gulf of Mexico. It looks to be the first time a company has specifically targeted acreage for this purpose in a lease sale and could be a harbinger for the shallow-water Gulf’s future utility. Despite the political uncertainty over future resource access in the Gulf — or perhaps because of it — Lease Sale 257 was one of the most active offshore oil and gas auctions in recent years. A total of 308 blocks received bids, including the 94 shallow-water leases Exxon acquired just off the coast of Texas. That was the highest total for a single sale in more than a decade. High bids totaled nearly $192 million, which was the highest since 2019 but still well off the highs seen last decade. Wood Mackenzie notes that the dollar per acre for deepwater blocks dropped to $177, a new low, reflecting continued capital discipline from operators. Most companies sought acreage near their existing operations, with some notable exceptions, including BP and Occidental, which ventured into some frontier exploratory waters.

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