Outer Continental Shelf (OCS) Central Gulf of Mexico (GOM) Oil and Gas Lease Sale 205, 50387-50393 [E7-17281]

Agencies

• DEPARTMENT OF THE INTERIOR
• Minerals Management Service

[Federal Register Volume 72, Number 169 (Friday, August 31, 2007)]
[Notices]
[Pages 50387-50393]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-17281]


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DEPARTMENT OF THE INTERIOR

Minerals Management Service


Outer Continental Shelf (OCS) Central Gulf of Mexico (GOM) Oil 
and Gas Lease Sale 205

AGENCY: Minerals Management Service, Interior.

ACTION: Final Notice of Sale (FNOS) 205.

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SUMMARY: On October 3, 2007, the MMS will open and publicly announce 
bids received for blocks offered in Central GOM Oil and Gas Lease Sale 
205, pursuant to the OCS Lands Act (43 U.S.C. 1331-1356, as amended) 
and the regulations issued thereunder (30 CFR part 256). The Final 
Notice of Sale 205 Package (FNOS 205 Package) contains information 
essential to bidders, and bidders are charged with the knowledge of the 
documents contained in the Package.

DATES: Public bid reading will begin at 9 a.m., Wednesday, October 3, 
2007, in the Grand Ballroom C of the Sheraton New Orleans Hotel, 500 
Canal Street, New Orleans, Louisiana. All times referred to in this 
document are local New Orleans times, unless otherwise specified.

ADDRESSES: Bidders can obtain a FNOS 205 Package containing this Notice 
of Sale and several supporting and essential documents referenced 
herein from the MMS Gulf of Mexico Region Public Information Unit, 1201 
Elmwood Park Boulevard, New Orleans, Louisiana 70123-2394, (504) 736-
2519 or (800) 200-GULF, or via the MMS Internet Web site at https://
www.gomr.mms.gov.
    Filing of Bids: Bidders must submit sealed bids to the Regional 
Director (RD), MMS Gulf of Mexico Region, 1201 Elmwood Park Boulevard, 
New Orleans, Louisiana 70123-2394, between 8 a.m. and 4 p.m. on normal 
working days, and from 8 a.m. to the Bid Submission Deadline of 10 a.m. 
on Tuesday, October 2, 2007. If bids are mailed, please address the 
envelope containing all of the sealed bids as follows:
    Attention: Supervisor, Sales and Support Unit (MS 5422), Leasing 
Activities Section, MMS Gulf of Mexico Region, 1201 Elmwood Park 
Boulevard, New Orleans, Louisiana 70123-2394. Contains Sealed Bids for 
Oil and Gas Lease Sale 205. Please Deliver to Ms. Nancy Kornrumpf, 6th 
Floor, Immediately.

    Please note: Bidders mailing their bid(s) are advised to call 
Ms. Nancy Kornrumpf (504) 736-2726, immediately after putting their 
bid(s) in the mail.


[[Page 50388]]


    If the RD receives bids later than the time and date specified 
above, he will return those 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. on Tuesday, 
October 2, 2007. Should an unexpected event such as flooding or travel 
restrictions be significantly disruptive to bid submission, the MMS 
Gulf of Mexico Region may extend the Bid Submission Deadline. Bidders 
may call (504) 736-0557 for information about the possible extension of 
the Bid Submission Deadline due to such an event.
    Areas Offered for Leasing: The MMS is offering for leasing all 
blocks and partial blocks listed in the document ``Blocks Available for 
Leasing in Central GOM Oil and Gas Lease Sale 205'' included in the 
FNOS 205 Package. All of these blocks are shown on the following 
Leasing Maps and Official Protraction Diagrams:

Outer Continental Shelf Leasing Maps--Louisiana Map Numbers 1 through 
12 (These 30 maps sell for $2.00 each.)

LA1 West Cameron Area (Revised November 1, 2000).
LA1A West Cameron Area, West Addition (Revised February 28, 2007).
LA1B West Cameron Area, South Addition (Revised February 28, 2007).
LA2 East Cameron Area (Revised November 1, 2000).
LA2A East Cameron Area, South Addition (Revised November 1, 2000).
LA3 Vermilion Area (Revised November 1, 2000).
LA3A South Marsh Island Area (Revised November 1, 2000).
LA3B Vermilion Area, South Addition (Revised November 1, 2000).
LA3C South Marsh Island Area, South Addition (Revised November 1, 
2000).
LA3D South Marsh Island Area, North Addition (Revised November 1, 
2000).
LA4 Eugene Island Area (Revised November 1, 2000).
LA4A Eugene Island Area, South Addition (Revised November 1, 2000).
LA5 Ship Shoal Area (Revised November 1, 2000).
LA5A Ship Shoal Area, South Addition (Revised November 1, 2000).
LA6 South Timbalier Area (Revised November 1, 2000).
LA6A South Timbalier Area, South Addition (Revised November 1, 2000).
LA6B South Pelto Area (Revised November 1, 2000).
LA6C Bay Marchand Area (Revised November 1, 2000).
LA7 Grand Isle Area (Revised November 1, 2000).
LA7A Grand Isle Area, South Addition (Revised February 17, 2004).
LA8 West Delta Area (Revised November 1, 2000).
LA8A West Delta Area, South Addition (Revised November 1, 2000).
LA9 South Pass Area (Revised November 1, 2000).
LA9A South Pass Area, South and East Addition (Revised November 1, 
2000).
LA10 Main Pass Area (Revised November 1, 2000).
LA10A Main Pass Area, South and East Addition (Revised November 1, 
2000).
LA10B Breton Sound Area (Revised November 1, 2000).
LA11 Chandeleur Area (Revised November 1, 2000).
LA11A Chandeleur Area, East Addition (Revised November 1, 2000).
LA12 Sabine Pass Area (Revised February 28, 2007).

Outer Continental Shelf Official Protraction Diagrams (These 19 
diagrams sell for $2.00 each.)

NG15-02 Garden Banks (Revised February 28, 2007).
NG15-03 Green Canyon (Revised November 1, 2000).
NG15-05 Keathley Canyon (Revised February 28, 2007).
NG15-06 Walker Ridge (Revised November 1, 2000).
NG15-08 Sigsbee Escarpment (Revised February 28, 2007).
NG15-09 Amery Terrace (Revised October 25, 2000).
NG16-01 Atwater Valley (Revised November 1, 2000).
NG16-02 Lloyd Ridge (Revised February 28, 2007).
NG16-04 Lund (Revised November 1, 2000).
NG16-05 Henderson (Revised February 28, 2007).
NG16-07 Lund South (Revised November 1, 2000).
NG16-08 Florida Plain (Revised February 28, 2007).
NH15-12 Ewing Bank (Revised November 1, 2000).
NH16-04 Mobile (Revised November 1, 2000).
NH16-05 Pensacola (Revised February 28, 2007).
NH16-07 Viosca Knoll (Revised November 1, 2000).
NH16-08 Destin Dome (Revised February 28, 2007).
NH16-10 Mississippi Canyon (Revised November 1, 2000).
NH16-11 De Soto Canyon (Revised February 28, 2007).

    Please note: A CD-ROM (in ARC/INFO and Acrobat (.PDF) format) 
containing all of the GOM Leasing Maps and Official Protraction 
Diagrams, except for those not yet converted to digital format, is 
available from the MMS Gulf of Mexico Region Public Information Unit 
for a price of $15.

    For the current status of all Central GOM Leasing Maps and Official 
Protraction Diagrams, please refer to 66 FR 28002 (published May 21, 
2001), 69 FR 23211 (published April 28, 2004), 72 FR 27590 (published 
May 16, 2007), and 72 FR 35720 (published June 29, 2007). In addition, 
Supplemental Official OCS Block Diagrams (SOBDs) for these blocks are 
available for blocks which contain the ``U.S. 200 Nautical Mile Limit'' 
line and the ``U.S.-Mexico Maritime Boundary'' line. These SOBDs are 
also available from the MMS Gulf of Mexico Region Public Information 
Unit. For additional information, please call Ms. Tara Montgomery (504) 
736-5722. All blocks are shown on these Leasing Maps and Official 
Protraction Diagrams. The available Federal acreage of all whole and 
partial blocks in this lease sale is shown in the document ``List of 
Blocks Available for Leasing in Lease Sale 205'' included in the FNOS 
205 Package. Some of these blocks may be partially leased or deferred, 
or transected by administrative lines such as the Federal/State 
jurisdictional line. A bid on a block must include all of the available 
Federal acreage of that block. Also, information on the unleased 
portions of such blocks is found in the document ``Central Gulf of 
Mexico Lease Sale 205--Unleased Split Blocks and Available Unleased 
Acreage of Blocks with Aliquots and Irregular Portions Under Lease or 
Deferred'' included in the FNOS 205 Package.
    Areas Not Available for Leasing: The following whole and partial 
blocks are not offered for lease in this lease sale:
    Block currently under appeal (although currently unleased, the 
following block is under appeal and bids will not be accepted):

Mississippi Canyon (Map Number NH16-10)

    Block 943.
    Whole blocks and portions of blocks which lie within the former 
Western Gap portion of the 1.4 nautical mile buffer zone north of the 
continental shelf boundary between the United States and Mexico:

Amery Terrace (Area NG 15-09)

    Whole Blocks: 280, 281, 318 through 320, and 355 through 359.
    Portions of Blocks: 235 through 238, 273 through 279, and 309 
through 317.

Sigsbee Escarpment (Area NG 15-08)

    Whole Blocks: 239, 284, 331 through 341.

[[Page 50389]]

    Portions of Blocks: 151, 195, 196, 240, 241, 285 through 298, 342 
through 349.
    Whole blocks which are beyond the United States Exclusive Economic 
Zone in the area known as the Northern portion of the Eastern Gap:

Lund South (Area NG 16-07)

    Blocks: 172, 173, 213 through 217, 253 through 261, 296 through 
305, and 349.

Henderson (Area NG 16-05)

    Blocks: 467, 510, 511, 553 through 555, 595 through 599, 638 
through 643, 681 through 688, 723 through 732, 766 through 776, 808 
through 820, 851 through 863, 893 through 906, 935 through 949, and 977 
through 993.

Florida Plain (Area NG 16-08)

    Blocks: 7 through 24, 49 through 67, 90 through 110, 133 through 
154, 177 through 197, 221 through 240, 265 through 283, 309 through 
327, and 363 through 370.
    Blocks that were previously included in the Eastern GOM planning 
area and are within 100 miles of the Florida coast:

Pensacola (Area NH 16-05)

    Blocks: 751 through 754, 793 through 798, 837 through 842, 881 
through 886, 925 through 930, 969 through 975.

Destin Dome (Area NH 16-08)

    Blocks: 1 through 7, 45 through 51, 89 through 96, 133 through 140, 
177 through 184, 221 through 228, 265 through 273, 309 through 317, 353 
through 361, 397 through 405, 441 through 450, 485 through 494, 529 
through 538, 573 through 582, 617 through 627, 661 through 671, 705 
through 715, 749 through 759, 793 through 804, 837 through 848, 881 
through 892, 925 through 936, and 969 through 981.

DeSoto Canyon (Area NH 16-11)

    Whole Blocks: 1 through 16, 45 through 60, and 92 through 102.
    Portions of Blocks: 89 through 91, 103, 104, 135 through 147.
    Blocks outside the original Sale 181 area that were previously 
included in the Eastern GOM planning area and are beyond 100 miles of 
the Florida coast, which are under the 1998 Presidential moratorium 
until 2012:

DeSoto Canyon (Area NH 16-11)

    Whole Blocks: 148, and 185 through 193.
    Portions of Blocks: 103, 104, and 141 through 147.
    Blocks east of the Military Mission Line (i.e. the north-south line 
at 86 degrees 41 minutes west longitude), and north of the Northern 
portion of the Eastern Gap, and west of the Central and Eastern 
Planning Area Boundary:

Henderson (Area NG 16-05)

    Portions of Blocks: 246, 290, 334, 378, 422, and 466.
    Blocks that are south of the Sale 181 area, as approved in the 
Final Outer Continental Shelf Oil and Gas Leasing Program for 1997-
2002, and north of the previously noted Northern portion of the Eastern 
Gap and west of the Military Mission Line:

Lloyd Ridge (Area NG 16-02)

    Blocks: 529 through 550, 573 through 595, 617 through 639, 661 
through 683, 705 through 727, 749 through 771, 793 through 816, 837 
through 860, 881 through 904, 925 through 948, and 969 through 992.

Henderson (Area NG 16-05)

    Whole Blocks: 1 through 25, 45 through 69, 89 through 113, 133 
through 157, 177 through 201, 221 through 245, 265 through 289, 309 
through 333, 353 through 377, 397 through 421, 441 through 465, 485 
through 509, 529 through 552, 573 through 594, 617 through 637, 661 
through 680, 705 through 722, 749 through 765, 793 through 807, 837 
through 850, 881 through 892, 925 through 934, and 969 through 976.
    Portions of Blocks: 246, 290, 334, 378, 422, and 466.

Florida Plain (Area NG 16-08)

    Blocks 1 through 6, 45 through 48, and 89.
    Statutes and Regulations: Each lease issued in this lease sale is 
subject to the OCS Lands Act of August 7, 1953; 43 U.S.C. 1331 et seq., 
as amended, hereinafter called ``the Act''; all regulations issued 
pursuant to the Act and in existence upon the Effective Date of the 
lease; all regulations issued pursuant to the statute in the future 
which provide for the prevention of waste and conservation of the 
natural resources of the OCS and the protection of correlative rights 
therein; and all other applicable statutes and regulations.
    Lease Terms and Conditions: Initial periods, extensions of initial 
periods, minimum bonus bid amounts, rental rates, escalating rental 
rates for leases with an approved extension of the initial 5-year 
period, royalty rates, minimum royalty, and royalty suspension areas, 
if any, applicable to this sale are noted below. Depictions of related 
areas are shown on the map ``Lease Terms and Economic Conditions, Lease 
Sale 205, Final'' for leases resulting from this lease sale.

    Please Note: The MMS has published new official leasing maps and 
protraction diagrams that include the newly-defined administrative 
planning area boundaries implemented in this sale. These new 
boundaries are depicted on the ``Lease Terms and Economic 
Conditions, Lease Sale 205, Final'' map.

    Initial Periods: 5 years for blocks in water depths of less than 
400 meters; 8 years for blocks in water depths of 400 to less than 800 
meters (pursuant to 30 CFR 256.37, commencement of an exploratory well 
is required within the first 5 years of the initial 8-year term to 
avoid lease cancellation); and 10 years for blocks in water depths of 
800 meters or deeper.
    Extensions of Initial Periods: A 5-year initial term for a lease 
issued from this sale may be extended to 8 years if a well targeting 
hydrocarbons below 25,000 feet true vertical depth subsea (TVD SS) is 
spudded within the first 5 years of the initial period. The 3-year 
extension may be granted in cases where the well is drilled to a target 
below 25,000 feet TVD SS and also in cases where the well does not 
reach a depth below 25,000 feet TVD SS due to mechanical or safety 
reasons.
    In order for the lease term to be extended to 8 years, you are 
required to submit to the Regional Supervisor for Production and 
Development, within 30 days after completion of the drilling operation, 
a letter providing the well number, spud date, information 
demonstrating the target below 25,000 feet TVD SS, and, if applicable, 
any safety or mechanical problems encountered that prevented the well 
from reaching a depth below 25,000 feet TVD SS. The Regional Supervisor 
must concur in writing that the conditions have been met to extend the 
lease term 3 years. The Regional Supervisor will provide written 
confirmation of any lease extension within 30 days of receipt of the 
letter provided.
    For any lease that has a well spudded in the first 5 years of the 
initial period with a hydrocarbon target below 25,000 feet TVD SS, the 
regulations found at 30 CFR 250.175(a), (b), and (c) will not be 
applicable at the end of the 5th year.
    For any lease that does not have a well spudded in the first 5 
years of the initial period which targets hydrocarbons below 25,000 
feet TVD SS, the regulations found at 30 CFR 250.175(a), (b), and (c) 
will be applicable, but the 3-year extension will not be available. At 
the end of the 8th year, the lessee is free to use all lease term 
extension provisions under the regulations.

[[Page 50390]]

    Minimum Bonus Bid Amounts: A bonus bid will not be considered for 
acceptance unless it provides for a cash bonus in the amount of $25 or 
more per acre or fraction thereof for blocks in water depths of less 
than 400 meters or $37.50 or more per acre or fraction thereof for 
blocks in water depths of 400 meters or deeper; to confirm the exact 
calculation of the minimum bonus bid amount for each block, see ``List 
of Blocks Available for Leasing'' contained in the FNOS 205 Package. 
Please note that bonus bids must be in whole dollar amounts (i.e., any 
cents will be disregarded by the MMS).
    Rental Rates: $6.25 per acre or fraction thereof for blocks in 
water depths of less than 200 meters and $9.50 per acre or fraction 
thereof for blocks in water depths of 200 meters or deeper, to be paid 
on or before the 1st day of each lease year until a discovery in paying 
quantities of oil or gas, then at the expiration of each lease year 
until the start of royalty-bearing production. An exception to this 
rental rate requirement will be escalating rental rates in the 6th, 
7th, and 8th year for leases with an approved extension of the initial 
5-year period, as noted in the following paragraph of this document.
    Escalating Rental Rates for Leases With an Approved Extension of 
the Initial 5-year Period: Any lease granted a 3-year extension beyond 
the initial 5-year period will pay an escalating rental rate as set out 
in the following table, to be paid on or before the 1st day of each 
lease year until determination of well producibility is received, then 
at the expiration of each lease year until the start of royalty-bearing 
production:

----------------------------------------------------------------------------------------------------------------
                                Escalating annual rental rate*
   Extended lease year no.       for a lease in less than 200     Escalating annual rental rate* for a lease in
                                      meters water depth             200 to less than 400 meters water depth
----------------------------------------------------------------------------------------------------------------
6............................  $12.50 per acre or fraction      $19.00 per acre or fraction thereof.
                                thereof.
7............................  $18.75 per acre or fraction      $28.50 per acre or fraction thereof.
                                thereof.
8............................  $25.00 per acre or fraction      $38.00 per acre or fraction thereof.
                                thereof.
----------------------------------------------------------------------------------------------------------------
* If another well is spudded during the 3-year extended term of the lease that targets hydrocarbons below 25,000
  feet TVD SS, and MMS concurs that this situation has been met, the rental rate will be frozen at the rental
  rate in effect during the lease year in which the well was spudded.

    Royalty Rates: 16\2/3\ percent royalty rate for blocks in all water 
depths, except during periods of royalty suspension, to be paid monthly 
on the last day of the month next following the month during which the 
production is obtained.
    Minimum Royalty: After the start of royalty-bearing production and 
notwithstanding any royalty suspension which may apply: $6.25 per acre 
or fraction thereof per year for blocks in water depths of less than 
200 meters and $9.50 per acre or fraction thereof per year for blocks 
in water depths of 200 meters or deeper, to be paid at the expiration 
of each lease year with credit applied for actual royalty paid during 
the lease year. If actual royalty paid exceeds the minimum royalty 
requirement, then no minimum royalty payment is due.

Royalty Suspension Provisions

    Leases with royalty suspension volumes are authorized under 
existing MMS rules at 30 CFR Part 260. There are no circumstances under 
which a single lease could receive a royalty suspension both for deep 
gas production and for deepwater production.
    Section 344 of the Energy Policy Act of 2005, Public Law 109-058 
(EPAct05) extends existing deep gas incentives in two ways. First, it 
mandates an RSV of at least 35 billion cubic feet (Bcf) of natural gas 
for certain wells completed in a third drilling depth category (greater 
than 20,000 feet subsea) for leases in 0-400 meters of water. Second, 
section 344 directs that the same incentives prescribed in MMS' 2004 
rule for wells completed between 15,000 feet and 20,000 feet TVD SS on 
leases in 0-200 meters of water be applied to leases in 200-400 meters 
of water.
    Section 345 of the EPAct05 directs continuation of the MMS deep 
water incentive program utilized since 2001 in the Gulf of Mexico for 
leases issued between August 8, 2005, and August 8, 2010, and provides 
for an increase in royalty suspension volume from 12 MMBOE to 16 MMBOE 
for leases in water depths greater than 2000 meters.

Deep Gas Royalty Suspensions

    A lease issued as a result of this sale may be eligible for royalty 
relief authorized under the EPAct05, Section 344 (Incentives for 
Natural Gas Production from Deep Wells in the Shallow Waters of the 
Gulf of Mexico). The MMS published a proposed rule on May 18, 2007, and 
will publish a final rulemaking implementing this section of the 
EPAct05, and if a lease is eligible, it will be subject to the 
provisions of that final rulemaking, including any price threshold 
provisions. Please refer to the Royalty Suspension Provisions cited 
below.
    A. The following Royalty Suspension Provisions apply to qualifying 
deep wells on leases at least partly in water depths up to 200 meters: 
Such wells require a perforated interval the top of which is from 
15,000 to less than 20,000 feet true vertical depth subsea (TVD SS). 
Suspension volumes, conditions, and requirements prescribed in 30 CFR 
203.41 through 203.47 and any amendments or successor regulations apply 
to deep gas production from a lease in this water depth range issued as 
a result of this sale. Definitions that apply to this category of 
royalty relief can be found in 30 CFR 203.0. To receive this category 
of royalty relief, production from a qualified well or drilling of a 
certified unsuccessful well must commence before May 3, 2009.
    B. The following Royalty Suspension Provisions apply to qualifying 
deep wells on leases entirely in water depths more than 200 but less 
than 400 meters: Such wells require a perforated interval the top of 
which is from 15,000 to less than 20,000 feet TVD SS. The EPAct05 
requires the Secretary to issue regulations granting suspension volumes 
to leases entirely in water depth more than 200 but less than 400 
meters that will be calculated using the same methodology as is 
currently employed for leases at least partly in water depth up to 200 
meters. Deep wells on leases in the 200-400 meter water depth range 
issued in Sale 205 will be eligible for royalty relief prescribed in 
the final rulemaking implementing section 344 of the EPAct05.
    C. The following Royalty Suspension Provisions apply to qualifying 
ultra deep wells on leases entirely in water depths less than 400 
meters: Ultra deep wells (i.e., wells completed with a perforated 
interval the top of which is 20,000 feet or deeper TVD SS) on leases 
entirely in water depths less than 400 meters issued in Sale 205 will 
be eligible for royalty relief prescribed in a final rulemaking 
implementing section 344 of the EPAct05.

[[Page 50391]]

Deep Water Royalty Suspensions

    The Following Royalty Suspension Provisions Apply to Deep Water Oil 
and Gas Production: A lease issued as a result of this sale may be 
eligible for royalty relief under the EPAct05, section 345 (Royalty 
Relief for Deep Water Production). The following Royalty Suspension 
Provisions for deep water oil and gas production apply to a lease 
issued as a result of this sale. In addition to these provisions, and 
the EPAct05, refer to 30 CFR 218.151 and applicable parts of 260.120-
260.124 for regulations on how royalty suspensions relate to field 
assignment, product types, rental obligations, and supplemental royalty 
relief.
    1. A lease in water depths of 400 meters or more will receive a 
royalty suspension as follows, according to the water depth range in 
which the lease is located:
    400 meters to less than 800 meters: 5 million barrels of oil 
equivalent (BOE).
    800 meters to less than 1600 meters: 9 million BOE.
    1600 meters to 2000 meters: 12 million BOE.
    Greater than 2000 meters: 16 million BOE.
    2. In any calendar year during which the arithmetic average of the 
daily closing prices for the nearby delivery month on the New York 
Mercantile Exchange (NYMEX) for the applicable product exceeds the 
adjusted product price threshold, the lessee must pay royalty on 
production that would otherwise receive royalty relief under 30 CFR 
Part 260 or supplemental relief under 30 CFR Part 203, and such 
production will count towards the royalty suspension volume.
    (a) The base level price threshold for light sweet crude oil is set 
at $35.75 per barrel in 2006. The adjusted oil price threshold in any 
subsequent calendar year is computed by changing the base price by the 
percentage by which the implicit price deflator for the gross domestic 
product has changed during the calendar year.
    (b) The base level price threshold for natural gas is set at $4.47 
per million British thermal units (MMBTU) in 2006. The adjusted gas 
price threshold in any subsequent calendar year is computed by changing 
the base price by the percentage by which the implicit price deflator 
for the gross domestic product has changed during the calendar year.
    (c) As an example, if the deflator indicates that inflation is 2.5 
percent in 2007, then the price threshold in calendar year 2007 would 
become $36.64 per barrel for oil and $4.58 for gas. Therefore, royalty 
on oil production in calendar year 2007 would be due if the average of 
the daily closing prices for the nearby delivery month on the NYMEX in 
2007 exceeds $36.64 per barrel and royalty on gas production in 
calendar year 2007 would be due if the average of the daily closing 
prices for the nearby delivery month on the NYMEX in 2007 exceeds $4.58 
per MMBTU.
    (d) The MMS plans to provide notice in March of each year when 
adjusted price thresholds for the preceding year were exceeded. Once 
this determination is made, based on the then-most recent implicit 
price deflator information, any subsequent adjustments in the implicit 
price deflator published by the U.S. Government will not affect the 
determination previously made for that year by MMS regarding lessee 
qualification for royalty relief. Information on price thresholds is 
available at the MMS Web site (https://www.mms.gov/econ).
    (e) In cases where the actual average price for the product exceeds 
the adjusted price threshold in any calendar year, royalties must be 
paid no later than 90 days after the end of the year (see 30 CFR 
260.122(b)(2) for more detail) and royalties must be paid provisionally 
in the following calendar year (See 30 CFR 260.122(c) for more detail).
    (f) Full royalties are owed on all production from a lease after 
the Royalty Suspension Volume is exhausted, beginning on the first day 
of the month following the month in which the Royalty Suspension Volume 
is exhausted.
    Lease Stipulations: The map ``Stipulations and Deferred Blocks, 
Lease Sale 205, Final'' depicts the blocks on which one or more of 
twelve lease stipulations apply: (1) Topographic Features; (2) Live 
Bottoms; (3) Military Areas; (4) Evacuation; (5) Coordination; (6) 
Blocks South of Baldwin County, Alabama; (7) Law of the Sea Convention 
Royalty Payment; (8) Protected Species; (9) Limitation on Use of Seabed 
and Water Column in the Vicinity of the Approved Port Pelican Offshore 
Liquefied Natural Gas (LNG) Deepwater Port Receiving Terminal, 
Vermilion Area, Blocks 139 and 140; (10) Below Seabed Operations on 
Mississippi Canyon Area, Block 920; (11) Limitation on Use of Seabed 
and Water Column in the Vicinity of the Approved Gulf Landing Offshore 
LNG Deepwater Port Receiving Terminal, West Cameron Area, Block 213; 
and (12) Below Seabed Operations on a Portion of Mississippi Canyon 
Area, Block 650.

    Please Note: The MMS published new official leasing maps and 
protraction diagrams that include the newly-defined administrative 
planning area boundaries implemented in this sale. These new 
boundaries are depicted on the ``Stipulations and Deferred Blocks, 
Lease Sale 205, Final'' map.

    The texts of the stipulations are contained in the document ``Lease 
Stipulations for Oil and Gas Lease Sale 205, Final'' included in the 
FNOS 205 Package. In addition, the ``List of Blocks Available for 
Leasing'' which is contained in the FNOS 205 Package identifies for 
each block listed the lease stipulations applicable to that block.
    Information to Lessees: The FNOS 205 Package contains an 
``Information To Lessees'' document which provides detailed information 
on certain specific issues pertaining to this oil and gas lease sale.
    Method of Bidding: For each block bid upon, a bidder must submit a 
separate signed bid in a sealed envelope labeled ``Sealed Bid for Oil 
and Gas Lease Sale 205, not to be opened until 9 a.m., Wednesday, 
October 3, 2007.'' The submitting company's name, its GOM Company 
number, the map name, map number, and block number should be clearly 
identified on the outside of the envelope. Please refer to the sample 
bid envelope included within the FNOS 205 Package. Please also refer to 
the Telephone Numbers/Addresses of Bidders Form included within the 
FNOS 205 Package. We are requesting that you provide this information 
in the format suggested for each lease sale. Please provide this 
information prior to or at the time of bid submission. Do not enclose 
this form inside the sealed bid envelope. The total amount of the 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 FNOS 205 Package. A blank 
bid form has been provided for your convenience which may be copied and 
filled in.
    The MMS published in the Federal Register a list of restricted 
joint bidders, which applies to this lease sale, at 72 FR 19214 on 
April 17, 2007. Please also refer to joint bidding provisions at 30 CFR 
256.41 for additional information. Bidders must execute all documents 
in conformance with signatory authorizations on file in the MMS Gulf of 
Mexico Region Adjudication Unit. Partnerships also must submit or have 
on file a list of signatories authorized to bind the partnership. 
Bidders submitting joint bids must include on

[[Page 50392]]

the bid form the proportionate interest of each participating bidder, 
stated as a percentage, using 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. 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 payment 
of the one-fifth bonus bid amount on all high bids. A statement to this 
effect must be included on each bid (see the document ``Bid Form and 
Envelope'' contained in the FNOS 205 Package).
    Rounding: The following procedure must be used to calculate the 
minimum bonus bid, annual rental, and minimum royalty: Round up to the 
next whole acre if the tract acreage contains a decimal figure prior to 
calculating the minimum bonus bid, annual rental, and minimum royalty 
amounts. The appropriate rate per acre is applied to the next whole 
(rounded up) acreage figure, and the resultant calculation is rounded 
up to the next whole dollar amount if the calculation results in a 
decimal figure (see next paragraph).

    Please note: The minimum bonus bid calculation, including all 
rounding, is shown in the document ``List of Blocks Available for 
Leasing in Lease Sale 205'' included in the FNOS 205 Package.

    Bonus Bid Deposit: Each bidder submitting an apparent high bid must 
submit a bonus bid deposit to the MMS equal to one-fifth of the bonus 
bid amount for each such bid. Under the authority granted by 30 CFR 
256.46(b), the MMS requires bidders to use electronic funds transfer 
procedures for payment of one-fifth bonus bid deposits for Lease Sale 
205, following the detailed instructions contained in the document 
``Instructions for Making EFT Bonus Payments'' which can be found on 
the MMS Web site at https://www.gomr.mms.gov/homepg/lsesale/205/
cgom205.html. All payments must be electronically deposited into an 
interest-bearing account in the U.S. Treasury (account specified in the 
EFT instructions) by 11 a.m. Eastern Time the day following bid 
reading. Such a deposit does not constitute and shall not be construed 
as acceptance of any bid on behalf of the United States. If a lease is 
awarded, however, MMS requests that only one transaction be used for 
payment of the four-fifths bonus bid amount and the first year's 
rental.

    Please note: Certain bid submitters (i.e., those that are NOT 
currently an OCS mineral lease record title holder or designated 
operator OR those that have ever defaulted on a one-fifth bonus bid 
payment (EFT or otherwise)) are required to guarantee (secure) their 
one-fifth bonus bid payment prior to the submission of bids. For 
those who must secure the EFT one-fifth bonus bid payment, one of 
the following options may be used: (1) Provide a third-party 
guarantee; (2) Amend bond coverage; (3) Provide a letter of credit; 
or (4) Provide a lump sum payment in advance via EFT. The EFT 
instructions specify the requirements for each option.

    Withdrawal of Blocks: The United States reserves the right to 
withdraw any block from this lease sale prior to issuance of a written 
acceptance of a bid for the block.
    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 block will be awarded to any bidder, 
unless the bidder has complied with all requirements of this Notice, 
including the documents contained in the associated FNOS 205 Package 
and applicable regulations; the bid is the highest valid bid; and the 
amount of the bid has been determined to be adequate by the authorized 
officer. Any bid submitted which does not conform to the requirements 
of this Notice, the Act, and other applicable regulations may be 
returned to the person submitting that bid by the RD and not considered 
for acceptance. The Attorney General may also review the results of the 
lease sale prior to the acceptance of bids and issuance of leases. To 
ensure that the Government receives a fair return for the conveyance of 
lease rights for this lease sale, high bids will be evaluated in 
accordance with MMS bid adequacy procedures. A copy of current 
procedures, ``Modifications to the Bid Adequacy Procedures'' at 64 FR 
37560 on July 12, 1999, can be obtained from the MMS Gulf of Mexico 
Region Public Information Unit or via the MMS Internet Web site at 
https://www.gomr.mms.gov/homepg/lsesale/bidadeq.html.
    Successful Bidders: As required by the MMS, each company that has 
been awarded a lease must execute all copies of the lease (Form MMS-
2005 (March 1986) as amended), pay by EFT the balance of the bonus bid 
amount and the first year's rental for each lease issued in accordance 
with the requirements of 30 CFR 218.155, and satisfy the bonding 
requirements of 30 CFR 256, subpart I, as amended.
    Also, in accordance with regulations at 43 CFR, part 42, subpart C, 
and/or 2 CFR, part 1400, the lessee shall comply with the U.S. 
Department of the Interior's nonprocurement debarment and suspension 
requirements and agrees to communicate this requirement to comply with 
these regulations to persons with whom the lessee does business as it 
relates to this lease by including this term as a condition to enter 
into their contracts and other transactions.
    Affirmative Action: The MMS requests that, prior to bidding, Equal 
Opportunity Affirmative Action Representation Form MMS 2032 (June 1985) 
and Equal Opportunity Compliance Report Certification Form MMS 2033 
(June 1985) be on file in the MMS Gulf of Mexico Region Adjudication 
Unit. This certification is required by 41 CFR 60 and Executive Order 
No. 11246 of September 24, 1965, as amended by Executive Order No. 
11375 of October 13, 1967. In any event, prior to the execution of any 
lease contract, both forms are required to be on file in the MMS Gulf 
of Mexico Region Adjudication Unit.
    Geophysical Data and Information Statement: Pursuant to 30 CFR 
251.12, the MMS has a right to access geophysical data and information 
collected under a permit in the OCS. Every bidder submitting a bid on a 
block in Sale 205, or participating as a joint bidder in such a bid, 
must submit a Geophysical Data and Information Statement (GDIS) 
identifying any processed or reprocessed pre- and post-stack depth 
migrated geophysical data and information used as part of the decision 
to bid or participate in a bid on the block. The GDIS should clearly 
identify the survey type (2-D or 3-D); survey extent (i.e., number of 
line miles for 2D or number of blocks for 3D) and imaging type (pre-
stack, post-stack and migration algorithm) of the data and information. 
The statement must also include the name and phone number of a contact 
person, and an alternate, who are both knowledgeable about the depth 
data listed, the owner or controller of the reprocessed data or 
information, the survey from which the data was reprocessed and the 
owner/controller of the original data set, the date of reprocessing and 
whether the data was processed in-house or by a contractor. In the 
event such data and information includes multiple data sets processed 
from the same survey using different velocity models or different 
processing parameters, you should identify only the highest quality 
data set used for bid preparation. The MMS reserves the right to query 
about alternate datasets and to quality check and compare the listed 
and alternative data sets to determine which data set most closely 
meets the

[[Page 50393]]

needs of the fair market value determination process.
    The statement must also identify each block upon which a bidder 
participated in a bid but for which it does not possess or control such 
depth data and information.
    In the event your company supplies any type of data to the MMS, in 
order to get reimbursed, your company must be registered with the 
Central Contractor Registration (CCR) at https://www.ccr.gov. This is a 
requirement that was implemented on October 1, 2003, and requires all 
entities doing business with the Government to complete a business 
profile in CCR and update it annually. Payments are made electronically 
based on the information contained in CCR. Therefore, if your company 
is not actively registered in CCR, the MMS will not be able to 
reimburse or pay your company for any data supplied.
    An Example of the Preferred Format for the Geophysical Data and 
Information Statement and a sample of the Geophysical Envelope 
Preferred Format are included in the FNOS 205 Package.
    Please also refer to NTL No. 2003-G05 for more detail concerning 
submission of the Geophysical Data and Information Statement, making 
the data available to the MMS following the lease sale, preferred 
format, reimbursement for costs, and confidentiality.

    Dated: August 24, 2007.
Randall B. Luthi,
Director, Minerals Management Service.
[FR Doc. E7-17281 Filed 8-30-07; 8:45 am]
BILLING CODE 4310-MR-P