Abstract: Competition and Quest for Offshore Leases

C. E. McMichael, R. W. Stephens

At offshore lease sales there are great differences of opinion among the bidders as to the values of tracts offered. These differences arise from the great degree of uncertainty present in the evaluation process. Further, this uncertainty, as reflected in the bidding, has not diminished through time with the development of new exploration techniques. Difference in opinion insures that a high percentage of the oil and gas in a sale area will be found and the public will receive "top dollar" for the leases.

An analysis of the top 15 Gulf of Mexico tracts in each federal lease sale through 1974 suggests that the greater the uncertainty the greater is the likelihood that the sum of the winning bids will be considerably more than the industry consensus of the value of the acreage offered.

AAPG Search and Discovery Article #90975©1976 GCAGS- GC Section SEPM Annual Meeting Shreveport, Louisiana