A Gale Force Lease Sale

Back in October, the heavyweight offshore oil explorers danced up a storm in a heralded Central Gulf of Mexico lease sale. I suggested that the firms' acreage avarice wasn't close to letting up, and the most recent lease sale confirms this. Last week's Central Gulf sale touched a fresh record of $3.7 billion in high bids.

In terms of number of high bids submitted, BP (NYSE: BP  ) and Chevron (NYSE: CVX  ) led the petroleum pack. These companies didn't bring the big guns, however. The company bidding the most in dollar terms was actually Hess (NYSE: HES  ) . Yeah -- the guys that sell those toy trucks at Christmastime. Hess doesn't get a lot of press, but with more than half a billion dollars' worth of total bids, the company is firmly asserting itself.

Marathon Oil (NYSE: MRO  ) was in the mix again, this time offering nearly $100 million for a single block in the Walker Ridge area. The only higher single-block bid came from a consortium of Anadarko (NYSE: APC  ) , Murphy Oil (NYSE: MUR  ) , and Samson Offshore.

Unlike August's Western Gulf sale, StatoilHydro (NYSE: STO  ) didn't make much of a splash, but stealthy Cobalt International Energy came to play once again. The privately held firm took second place after Hess in terms of high bid dollars, edging out BP by about $50 million. Cobalt clearly has the cash, but can it deliver the discoveries? Only time will tell.

Though far less flashy, there was also a small sale in the Eastern Gulf, which was notable for its new revenue-sharing model with the coastal states. This is very much a frontier area, never before subjected to seismic study. So while the bidding was modest, it'll be worth monitoring the winners' exploration efforts.

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10/27/2016 4:01 PM
CVX $99.92 Down -1.27 -1.26%
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HES $50.42 Up +0.16 +0.32%
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