This news story is not really surprising, but still gives one pause anyway.
The bottom line is that the US government can open up all the drilling opportunities it wants, but the price of oil and the capital crunch may not necessarily bring a rush of bidders.
Up in Alaska, Dallas-based partnership Petro-Hunt has relinquished bids on 72 leases offered in the US Bureau of Land Managements September 24 lease sale in the 23-million-acre National Petroleum Reserve-Alaska. Platts' Alaska correspondent Tim Bradner reports that the Dallas-based company, owned by the Hunt family, had been the most aggressive bidder in the lease sale. "Basically, they told us that in the current oil price environment they were unable to do an exploration program," Ruth McCoard, a BLM spokeswoman, said. "They are a new player in NPR-A exploration and the costs would be very high for them," she said.
Ken Boyd, a former state oil and gas director, told Platts that he thought Petro-Hunt did not have access to current seismic and well information as do other companies active in NPR-A and concluded it was in a weak position. The oil price decline may have been a final factor in the decision, but Boyd said he did not believe it was what caused the decision.
But six other companies bidding in the sale did make final payments to the BLM on bonuses bid in the sale and were awarded 78 leases.
Circle March 18 on your calendars. It's the next Gulf of Mexico lease sale date, this time for the Central Gulf. It may be the most transparent signal of just how much companies are pulling in their exploration plans as a result of falling prices or tighter lending standards....or both. All recent Gulf of Mexico sales have been strong, so it will be interesting to see if that streak continues in March.
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