Outer Continental Shelf, Central Gulf of Mexico, Oil and Gas Lease Sale 169

DEPARTMENT OF THE INTERIOR

Minerals Management Service

Outer Continental Shelf, Central Gulf of Mexico, Oil and Gas

Lease Sale 169

AGENCY: Minerals Management Service.

ACTION: Final notice of sale.

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1. Authority. The Minerals Management Service (MMS) is issuing this

Final Notice of Sale under the Outer Continental Shelf (OCS) Lands Act

(43 U.S.C. 1331-1356, as amended) and the regulations issued thereunder

(30 CFR Part 256).

A ``Sale Notice Package,'' containing this Notice and several

supporting and essential documents referenced in the Notice, is

available from the MMS Gulf of Mexico Regional Office Public

Information Unit (see paragraph 15 of this Notice).

2. Filing of Bids. Bidders must comply with the following

requirements. Times specified hereafter are local New Orleans times

unless otherwise indicated.

(a) Filing of Bids. Sealed bids must be received by the Regional

Director (RD), Gulf of Mexico Region, MMS, 1201 Elmwood Park Boulevard,

New Orleans, Louisiana 70123-2394, during normal business hours (8 a.m.

to 4 p.m.) until the Bid Submission Deadline at 10 a.m., Tuesday, March

17, 1998. If the RD receives bids later than the time and date

specified above, he will return the bids unopened to bidders. Bidders

may not modify or withdraw their bids unless the RD receives a written

modification or written withdrawal request prior to 10 a.m., Tuesday,

March 17, 1998.

(b) Bid Opening Time. Bid Opening Time will be 9 a.m., Wednesday,

March 18, 1998, at the Hyatt Regency Hotel, 500 Poydras Plaza, New

Orleans, Louisiana. The MMS published a list of restricted joint

bidders, which applies to this sale, in the Federal Register at 62 FR

52771, on October 9, 1997.

(c) Natural Disasters. In the event of widespread flooding or other

natural disaster, the MMS Gulf of Mexico Regional Office may extend the

bid submission deadline. Bidders may call (504) 736-0537 for

information about the possible extension of the bid submission deadline

due to such an event.

3. Method of Bidding.

(a) Submission of Bids. For each tract bid upon, a bidder must

submit a separate signed bid in a sealed envelope labeled ``Sealed Bid

for Oil and Gas Lease Sale 169, not to be opened until 9 a.m.,

Wednesday, March 18, 1998.'' The total amount bid must be in a whole

dollar amount, any cent amount above the whole dollar will be ignored

by the MMS. Details of the information required on the bid(s) and the

bid envelope(s) are specified in the document ``Bid Form and Envelope''

contained in the Sale Notice Package (see paragraph 15 of this Notice).

Bidders are advised that the MMS considers the signed bid to be a

legally binding obligation on the part of the bidder(s) to comply with

all applicable regulations, including paying the \1/5\th bonus on all

high bids. A statement to this effect will be included on each bid (see

the document ``Bid Form and Envelope'' contained in the Sale Notice

Package).

Bidders must execute all document in conformance with signatory

authorizations on file in the MMS Gulf of Mexico Regional Office.

Partnerships also must submit or have on file a list of signatories

authorized to bind the partnership. Bidders submitting joint bids must

state on the bid form the proportionate interest of each participating

bidder, in percent to a maximum of five decimal places, e.g., 33.33333

percent. The MMS may require bidders to submit other documents in

accordance with 30 CFR 256.46. The MMS warns bidders against violation

of 18 U.S.C. 1860 prohibiting unlawful combination or intimidation of

bidders.

(b) Submission of the \1/5\th Bonus Payment. Bidders must submit

the \1/5\th cash bonus using one of the following options:

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(1) Bidders may submit with each bid \1/5\th of the cash bonus, in

cash or by cashier's check, bank draft, or certified check, payable to

the order of the U.S. Department of the Interior--Minerals Management

Service. For identification purposes, the following information must

appear on the check or draft: Company name, GOM Company Number, and the

area and block bid on (abbreviation acceptable); or

(2) Bidders may use electronic funds transfer (EFT) payment for \1/

5\th of the cash bonus, payable to the Minerals Management Service.

Bidders who choose this method must contact the MMS Royalty Management

(Mr. David Menard at (303) 231-3574) by the Bid Submission Deadline to

inform the MMS of the bidder's intent to use EFT, to clarify EFT

procedures to be used, and to designate an EFT Coordinator. Joint

bidders must designate one bidder as EFT Coordinator. The EFT

Coordinator refers to the bidder, i.e., the corporation, company, or

partnership submitting the bid(s), or an individual citizen submitting

bids on his or her own behalf (NOT an individual within a corporation/

company/partnership) for an OCS Lease Sale. EFT Coordinators must

submit the bids and ensure that the total of the \1/5\th cash bonus for

the high bids they submit is transferred to the MMS via EFT. The EFT

payment shall be made by either the Fedwire Deposit System (same day

payments) or the Automated Clearing House (overnight payments).

The Gulf of Mexico OCS Regional Office will advise bidders who

submit high bids of the amount required for EFT payment. Promptly after

notification, the EFT Coordinators must instruct their banks to send

via EFT the sum of the \1/5\th bonus for all high bids to the

appropriate United States Treasury account. Instructions for making EFT

\1/5\th bonus payments are included in the Sale Notice Package. [These

procedures/instructions are consistent with \4/5\th bonus and first

year rental payment procedures using EFT.]

Securing EFT payments. Bidders electing to use EFT procedures to

pay the \1/5\th bonus payments, EXCEPT for bidders who are current

Federal OCS leaseholders AND are exempt from supplemental bonding

requirements, must secure the EFT payments (see ``Instructions for

Making EFT \1/5\th Bonus Payments'' included with the Sale Notice

Package).

A bidder opting to use EFT for the \1/5\th bonus payment who does

not meet the above criteria must secure the EFT payment by one of the

three following methods:

(a) The bidder opting to use EFT for the \1/5\th bonus payment may

amend a $3 million areawide development bond by a Rider from the

issuing surety to contain provisions that the bond may be used to cover

pre-lease obligations. All other terms and conditions for the bond

shall remain unchanged. The Rider must be notarized and must be in

effect prior to submitting bids for OCS Lease Sale 169. If the $3

million areawide development coverage is through a U.S. Treasury Note

then a notarized letter from the bidder agreeing to the terms that the

Treasury Note may be used to cover pre-lease obligations must be

approved by the MMS prior to bid submission for Sale 169. That

provision must remain in effect until the EFT deposit is made. Details

of using an updated areawide development bond to secure the EFT payment

of the \1/5\th bonus are included in the ``Instructions for Making EFT

\1/5\th Bonus Payments'' document included with the Sale Notice

Package.

The EFT payment for \1/5\th of the sum of the high bids on blocks

must be received in the appropriate United States Treasury account no

later than 2:00 p.m., Eastern Time, on March 19, 1998, the day after

Bid Opening.

If the EFT payments are late or deficient in amount after 5:00

p.m., Eastern Time, on March 20, 1998, the MMS may call the bond/

Treasury Note to cover the delinquent payment plus interest.

(b) The bidder opting to use EFT for the \1/5\th bonus payment may

submit in a separate sealed envelope accompanying the bids, a letter of

credit (LOC) for at least \1/5\th of the sum of all bids submitted by

that bidder for Sale 169, including joint bids. A sample LOC is

enclosed in the ``Instructions for Making EFT \1/5\th Bonus Payments''

document included with the Sale Notice Package. The bidder must use

that sample clean, stand-by, irrevocable LOC with no modifications.

The LOC must have a minimum coverage period of 120 days. The LOC

must be from a bank that has a minimum Thomson BankWatch rating of:

``C'' for an LOC of less than $1 million; ``B/C'' for an LOC between $1

million to $10 million; or ``B'' for LOC over $10 million.

The LOC shall be submitted in a separate sealed envelope. Once the

EFT payment in an amount sufficient to cover that bidder's high bids is

credited to the appropriate United States Treasury account, the LOC

accompanying those bids will be returned or may be picked up at the

Gulf of Mexico Regional Office. Details of using an LOC to secure the

EFT payment of the \1/5\th bonus are included in the ``Instructions for

Making EFT \1/5\th Bonus Payments'' included with the Sale Notice

Package. The envelope containing this LOC document should be in the

following format:

LETTER OF CREDIT SECURING EFT PAYMENTS

Submitted by: Explorer LTD.

GOM Company No.: 20999

The EFT payment for \1/5\th of the sum of the high bids on blocks

must be received in the appropriate United States Treasury account no

later than 2:00 p.m., Eastern Time, on March 19, 1998, the day after

Bid Opening.

If the EFT payments are late or deficient in amount after 5:00

p.m., Eastern Time, on March 20, 1998, the MMS will draw on the LOC for

the total amount due, including interest.

(c) Alternatively, the bidder opting to use EFT for depositing the

\1/5\th bonus payment may submit, in a separate sealed envelope

accompanying the bids, a single payment for \1/5\th of the sum of all

bids submitted by that bidder for Sale 169, including joint bids. The

lump sum payment(s) in the sealed envelope(s) must be by cashier's

check, bank draft, or certified check, payable to the order of the U.S.

Department of the Interior--Minerals Management Service. Once the EFT

payment in an amount sufficient to cover that bidder's high bids is

credited to the appropriate United States Treasury account, the lump

sum payment accompanying those bids will be returned or may be picked

up at the Gulf of Mexico Regional Office. Details of using lump sum

check(s) to secure the EFT payment of the \1/5\th bonus are included in

the ``Instructions for Making EFT \1/5\th Bonus Payments'' included

with the Sale Notice Package. The envelope containing this payment

should be in the following format:

LUMP SUM CHECK SECURING EFT PAYMENTS

Submitted by: Explorer LTD.

GOM Company No.: 20999

The EFT payment for \1/5\th of the sum of the high bids on blocks

must be received in the appropriate United States Treasury account no

later than 2:00 p.m., Eastern Time, on March 19, 1998, the day after

Bid Opening.

If the EFT payments are late or deficient in amount after 5:00

p.m., Eastern Time, on March 20, 1998, the MMS will deposit lump sum

payments accompanying the bids into the appropriate United States

Treasury account. Should these payments (which secure both high bids

and unsuccessful bids) require a refund to the bidders, the MMS will

refund the difference without

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interest, through EFT as soon as practicable.

4. Minimum Bid, Yearly Rental, and Bidding Systems. The following

minimum bid, yearly rental, and bidding systems apply to this sale:

(a) Minimum Bid. Bidders must submit a cash bonus in the amount of

$25.00 or more per acre or fraction thereof with all bids submitted at

this sale.

(b) Yearly Rental. All leases awarded on tracts in water depths of

200 meters and greater (i.e., tracts in any of the three royalty

suspension areas), as depicted on the map ``Lease Terms, Bidding

Systems, and Royalty Suspension Areas, Sale 169,'' will require a

yearly rental payment of $7.50 per acre or fraction thereof until

initial production is obtained. This map is included in the Sale Notice

Package.

All leases awarded on other tracts (i.e., those in water depths of

less than 200 meters) will provide for a yearly rental payment of $5.00

per acre or fraction thereof until initial production is obtained.

(c) Bidding Systems. After initial production is obtained, leases

will require a minimum royalty of the amount per acre or fraction

thereof as specified as the yearly rental in paragraph 4(b) above,

except during periods of royalty suspension as discussed in paragraph

4(c)(3) of this Notice. The following royalty systems will be used in

this sale:

(1) Leases with a 12\1/2\-Percent Royalty. This royalty rate

applies to tracts in water depths of 400 meters or greater; this area

is shown on the Map ``Lease Terms, Bidding Systems, and Royalty

Suspension Areas, Sale 169'' applicable to this Notice (see paragraph

13). Leases issued on the tracts offered in this area will have a fixed

royalty rate of 12\1/2\ percent, except during periods of royalty

suspension (see paragraph 4(c)(3) of this Notice).

(2) Leases with a 16\2/3\-Percent Royalty. This royalty rate

applies to tracts in water depths of less than 400 meters (see

aforementioned map). Leases issued on the tracts offered in this area

will have a fixed rate of 16\2/3\ percent, except during periods of

royalty suspension for leases in water depths 200 meters or greater

(see paragraph 4(c)(3) of this Notice).

(3) Royalty Suspension. In accordance with Public Law 104-58,

signed by the President on November 28, 1995, the MMS has developed

procedures providing for the suspension of royalty payments on

production from eligible leases issued as a result of this sale.

A map titled ``Lease Terms, Bidding Systems, and Royalty Suspension

Areas, Sale 169'' depicting blocks in which such suspensions may apply

is included in the Sale Notice Package.

The final rule specifying royalty suspension terms for lease sales

in the Central and Western Gulf was published in the Federal Register

on January 16, 1998 (63 FR 2626). Additional information pertaining to

royalty suspension matters may be found in the document ``Information

to Lessees,'' contained in the Sale Notice Package.

5. Equal Opportunity. Bidders must have on file in the MMS Gulf of

Mexico Regional Office, prior to lease award, the certification

required by 41 CFR 60-1.7(b) and Executive Order No. 11246 of September

24, 1965, as amended by Executive Order No. 11375 of October 13, 1967,

on the Compliance Report Certification Form, Form MMS-2033 (June 1985),

and the Affirmative Action Representation Form, Form MMS-2032 (June

1985) (see the document ``Information to Lessees for Sale 169'' in the

Sale Notice Package).

6. Bid Opening. Bid opening will begin at the bid opening time

stated in paragraph 2. The opening of the bids is for the sole purpose

of publicly announcing bids received, and no bids will be accepted or

rejected at that time.

7. Deposit of Payment. Any payments made in accordance with

paragraph 3(b) above will be deposited by the Government in an

interest-bearing account in the U.S. Treasury during the period the

bids are being considered. Such a deposit does not constitute and shall

not be construed as acceptance of any bid on behalf of the United

States.

8. Withdrawal of Tracts. The United States reserves the right to

withdraw any tract from this sale prior to issuance of a written

acceptance of a bid for the tract.

9. Acceptance, Rejection, or Return of Bids. The United States

reserves the right to reject any and all bids. In any case, no bid will

be accepted, and no lease for any tract will be awarded to any bidder,

unless:

(a) the bidder has complied with all requirements of this Notice,

including the documents contained in the associated Sale Notice Package

(see paragraph 15 of this Notice) and applicable regulations;

(b) the bid is the highest valid bid; and

(c) the amount of the bid has been determined to be adequate by the

authorized officer.

No bonus bid will be considered for acceptance unless it provides

for a cash bonus in the amount of $25.00 or more per acre or fraction

thereof. Any bid submitted which does not conform to the requirements

of this Notice, the associated Sale Notice Package, the OCS Lands Act,

as amended, and other applicable regulations may be returned to the

person submitting that bid by the RD and not considered for acceptance.

To ensure that the Government receives a fair return for the

conveyance of lease rights for this sale, tracts will be evaluated in

accordance with established MMS bid adequacy procedures. A copy of the

current procedures (``Summary of Procedures for Determining Bid

Adequacy at Offshore Oil and Gas Lease Sales: Effective August 1997,

with Sale 168'') is available from the MMS Gulf of Mexico Regional

Office Public Information Unit (see paragraph 15 of this Notice). This

document incorporates changes announced in a Federal Register Notice at

62 FR 37589, dated July 14, 1997.

10. Successful Bidders. The following requirements apply to

successful bidders in this sale:

(a) Lease Issuance. The MMS will require each person who has

submitted a bid accepted by the authorized officer to execute copies of

the lease (Form MMS-2005 (March 1986) as amended), pay the balance of

the cash bonus bid along with the first year's annual rental for each

lease issued by EFT in accordance with the requirements of 30 CFR

218.155, and satisfy the bonding requirements of 30 CFR 256, Subpart I,

as amended.

Additional information pertaining to this matter may be found in

the document ``Information to Lessees'' contained in the Sale Notice

Package.

(b) Certification Regarding Nonprocurement Debarment, Suspension,

and Other Responsibility Matters--Primary Covered Transactions. Each

person involved as a bidder in a successful high bid must have on file,

in the MMS Gulf of Mexico Regional Office Adjudication Unit, a

currently valid certification that the person is not excluded from

participation in primary covered transactions under Federal

nonprocurement programs and activities. A certification previously

provided to that office remains currently valid until new or revised

information applicable to that certification becomes available. In the

event of new or revised applicable information, the MMS will require a

subsequent certification before lease issuance can occur. Persons

submitting such certifications should review the requirements of 43

CFR, Part 12, Subpart D, as amended in the Federal Register of June 26,

1995, at 60 FR 33035.

A copy of the certification form is contained in the Sale Notice

Package.

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11. Leasing Maps and Official Protraction Diagrams. The following

Leasing Maps or Official Protraction Diagrams, which may be purchased

from the MMS Gulf of Mexico Regional Office Public Information Unit

(see the document ``Information to Lessees'' contained in the Sale

Notice Package), depict the tracts offered for lease in this sale:

(a) Outer Continental Shelf (OCS) Leasing Maps--Louisiana Nos. 1

through 12. This is a set of 30 maps which sells for $32.

(b) Outer Continental Shelf Official Protraction Diagrams.

These diagrams sell for $2.00 each.

NH 15-12--Ewing Bank (rev. 12/02/76).

NH 16-4--Mobile (rev. 02/23/93).

NH 16-7--Viosca Knoll (rev. 12/02/76).

NH 16-10--Mississippi Canyon (rev. 05/01/96).

NG 15-3--Green Canyon (rev. 12/02/76).

NG 15-6--Walker Ridge (rev. 12/02/76).

NG 15-9--(No Name) (rev. 04/27/89).

NG 16-1--Atwater Valley (rev. 11/10/83).

NG 16-4--Lund (rev. 08/22/86).

NG 16-7--(No Name) (rev. 04/27/89).

12. Description of the Areas Offered for Bids.

(a) Acreage Available for Leasing. Acreage of blocks is shown on

Leasing Maps and Official Protraction Diagrams. Some of these blocks,

however, may be partially leased or transected by administrative lines

such as the Federal/State jurisdictional line. Information on the

unleased portions of such blocks, including the exact acreage, is

included in the document:

``Central Gulf of Mexico Lease Sale 169--Final. Unleased Split

Blocks and Unleased Acreage of Blocks with Aliquots and Irregular

Portions Under Lease.''

The Sale Notice Package contains this document.

(b) Tracts not available for leasing: The areas offered for leasing

include all those blocks shown on the OCS Leasing Maps and Official

Protraction Diagrams listed in paragraph 11(a) and (b), except for

those blocks or partial blocks already under lease and those blocks or

partial blocks listed below. A list of Central Gulf of Mexico tracts

currently under lease, titled ``Central Gulf of Mexico Leased Lands

List dated February 6, 1998'' is included in the Sale Notice Package.

Although currently unleased, no bids will be accepted in this Sale

on the following blocks which are currently under appeal: Main Pass

Area, South and East Addition, Blocks 253 and 254, and Viosca Knoll

Blocks 213 and 256.

Although currently unleased, no bids will be accepted in this Sale

on the following blocks which are beyond the United States Exclusive

Economic Zone. The offering of these blocks, which were identified in

the proposed Notice of Sale as the Northern portion of the Western and

Eastern Gaps, has been temporarily deferred by the Department of the

Interior in anticipation of the early commencement of negotiations with

the Government of Mexico on the delimitation of the continental shelf

in the Western Gap beyond the EEZ of both countries.

Area NG15-09

Blocks

133 through 135

177 through 184

221 through 238

265 through 281

309 through 320

358

Area NG16-07

Blocks

172, 173

213 through 217

252 through 261

296 through 305

349

13. Lease Terms and Stipulations.

(a) Leases resulting from this sale will have initial terms as

shown on the map ``Lease Terms, Bidding Systems, and Royalty Suspension

Areas, Sale 169.'' Copies of the map are included in the Sale Notice

Package. Copies of the lease form are available from the MMS Gulf of

Mexico Regional Office Public Information Unit (see the document

``Information to Lessees'' contained in the Sale Notice Package).

(b) The map titled ``Stipulations and Deferred Blocks, Sale 169''

depicts the blocks to which the four lease stipulations (Topographic

Features, Live Bottoms, Military Areas, and Blocks South of Baldwin

County, Alabama) apply. The text of the lease stipulations is contained

in the document ``Lease Stipulations for Oil and Gas Lease Sale 169;''

this map and document are contained in the Sale Notice Package. These

stipulations will become a part of any leases on applicable blocks

resulting from Sale 169. Three of the stipulations (Topographic

Features, Live Bottoms, and Military Areas) are the same stipulations

used in Sale 166, Central Gulf, held in March 1997. (See the Final

Notice of Sale for Sale 166 in the Federal Register at 62 FR 4789,

January 31, 1997.)

14. Information to Lessees. The Sale Notice Package contains a

document titled ``Information to Lessees.'' These Information to

Lessees items provide information on various matters of interest to

potential bidders.

15. Sale Notice Package. The Sale Notice Package, and individual

documents contained therein, are available from the Public Information

Unit, Minerals Management Service, 1201 Elmwood Park Boulevard, New

Orleans, Louisiana 70123-2394, either in writing or by telephone at

(504) 736-2519 or (800) 200 -GULF.

The documents referenced below and contained in the Sale Notice

Package contain information essential for bidders, and bidders are

charged with the knowledge contained therein. Included in the Package

are:

Cover sheet

Final Notice of Sale for Sale 169

Information to Lessees for Sale 169

Central Gulf of Mexico Leased Lands List dated February 6, 1998

Central Gulf of Mexico Lease Sale 169--Final. Unleased Split Blocks and

Unleased Acreage of Blocks with Aliquots and Irregular Portions Under

Lease

Lease Stipulations for Oil and Gas Lease Sale 169

Debarment Certification Form

Bid Form and Envelope

Phone Numbers/Addresses of Bidders Form

Instructions for Making EFT \1/5\th Bonus Payment

Lease Terms, Bidding Systems, and Royalty Suspension Areas, Sale 169

Map

Stipulations and Deferred Blocks, Sale 169 Map

For additional information, contact the Regional Supervisor for

Leasing and Environment, Minerals Management Service, 1201 Elmwood Park

Boulevard, New Orleans, Louisiana 70123-2394, or by telephone at (504)

736-2759. In addition, certain documents may be viewed and downloaded

from the MMS World Wide Web site at http://www.mms.gov. The MMS also

maintains a 24-hour Fax-on-Demand Service at (202) 219-1703.

Dated: February 6, 1998.

Robert E. Brown,

Acting Director, Minerals Management Service.

Bob Armstrong,

Assistant Secretary, Land and Minerals Management.

[FR Doc. 98-3532 Filed 2-12-98; 8:45 am]

BILLING CODE 4310-MR-M