And that is just the first year. There will be an annual fee on top of that for a minimum of 10 years unless either:
1. The feds change the rules like they enjoy doing so much or
2. The leassor hits a well and has to start paying royalty
Oil and gas companies are set to pay the government $110 million in high bids for leases in the western Gulf of Mexico, after an auction Wednesday that underscored the industry’s interest in deep-water territory.
Fourteen companies participated in the sale, which nominally put 21 million acres up for grabs, though ultimately, just 81 blocks spanning 433,823 acres were sold.
The industry’s interest was concentrated on the Alaminos Canyon area and territory near the U.S.-Mexico maritime border that had been off limits for development while the two countries enacted a treaty to govern oil development. About a quarter of the bids were for territory in that area.
“This sale . . . reaffirms the industry’s great interest in deep-water prospects in the transboundary area,” said Randall Luthi, head of the National Ocean Industries Association.
Western Gulf Sale