Outer Continental Shelf (OCS) Central Planning Area (CPA) Gulf of Mexico (GOM) Oil and Gas Lease Sale 208, 2092-2098 [E9-695]

Agencies

• DEPARTMENT OF THE INTERIOR
• Minerals Management Service (mms)
• Minerals Management Service

[Federal Register Volume 74, Number 9 (Wednesday, January 14, 2009)]
[Notices]
[Pages 2092-2098]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-695]


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DEPARTMENT OF THE INTERIOR

Minerals Management Service (MMS)


Outer Continental Shelf (OCS) Central Planning Area (CPA) Gulf of 
Mexico (GOM) Oil and Gas Lease Sale 208

AGENCY: Minerals Management Service, Interior.

ACTION: Final Notice of Sale (NOS) 208.

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SUMMARY: On Wednesday, March 18, 2009, the MMS will open and publicly 
announce bids received for blocks offered in CPA Oil and Gas Lease Sale 
208, 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 208 Package (Final NOS 208 Package) contains information 
essential to bidders, and bidders are charged with the knowledge of the 
documents contained in the Package.

DATES: Public bid reading for the CPA Oil and Gas Lease Sale 208 will 
begin at 9 a.m., Wednesday, March 18, 2009, at the Louisiana Superdome, 
1500 Sugarbowl Drive, New Orleans, Louisiana 70112. The lease sale will 
be held in the St. Charles Club Room on the second floor (Loge Level). 
Entry to the Superdome will be on the Poydras Street side of the 
building through Gate A on the Ground or Plaza Level, and parking 
should be available at Garage 6. All times referred to in this document 
are local New Orleans times, unless otherwise specified.

ADDRESSES: Bidders can obtain a Final NOS 208 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 GOM Homepage Address 
on the Internet 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, March 17, 2009, the day before the lease sale. 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 CPA Oil and Gas Lease Sale 208 Please Deliver 
to Ms. Nancy Kornrumpf, 6th Floor, Immediately

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

    If the RD receives bids later than the time and date specified 
above, he will return those bids unopened to bidders. 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 or access our Web site at: https://www.gomr.mms.gov 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 in CPA 
Oil and Gas Lease Sale 208, all blocks and partial blocks listed in the 
document ``List of Blocks Available for Leasing'' included in the Final 
NOS 208 Package. All of these blocks are shown on the following leasing 
maps and Official Protraction Diagrams (OPD's):

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)

[[Page 2093]]

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 Additions (Revised November 1, 
2000)
LA10 Main Pass Area (Revised November 1, 2000)
LA10A Main Pass Area, South and East Additions (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 August 1, 2008)
NG16-04 Lund (Revised November 1, 2000)
NG16-05 Henderson (Revised August 1, 2008)
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 August 1, 2008)

    Bidders are advised that the Central-Eastern Planning Area Boundary 
has been revised to match the Federal OCS Administrative Boundary for 
the DeSoto Canyon, Lloyd Ridge, and Henderson Areas. The new boundary 
splits blocks that were formerly ``stair-stepped'' and can be seen on 
the ``Stipulations and Deferred Blocks'' or ``Lease Terms and Economic 
Conditions'' maps, included in the Final NOS 208 Package. The 
boundaries along the Pensacola, Destin Dome, and Florida Plain Areas 
will remain ``stair-stepped'' for this lease sale. The administrative 
boundaries can also be viewed at: https://www.mms.gov/ld/
AdminBoundaries.htm.

    Please note: A CD-ROM (in ARC/INFO and Acrobat (.pdf) format) 
containing all of the GOM leasing maps and OPD's, 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. These 
GOM leasing maps and OPD's are also available for free online in 
.pdf and .gra format at: https://www.gomr.mms.gov/homepg/lsesale/
map_arc.html.

    For the current status of all CPA leasing maps and OPD's, please 
refer to 66 FR 28002 (published May 21, 2001), 69 FR 23211 (published 
April 28, 2004), 72 FR 27590 (published May 16, 2007), 72 FR 35720 
(published June 29, 2007), and 73 FR 63505 (October 24, 2008). In 
addition, Supplemental Official OCS Block Diagrams (SOBD's) are 
available for blocks which contain the ``U.S. 200 Nautical Mile Limit'' 
line and the ``U.S.-Mexico Maritime Boundary'' line. These SOBD's are 
also available from the MMS Gulf of Mexico Region Public Information 
Unit. For additional information, please call Ms. Tara Montgomery at 
(504) 736-5722.
    All blocks are shown on these leasing maps and OPD's. 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'' included 
in the Final NOS 208 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 
Planning Area Lease Sale 208--Unleased Split Blocks and Available 
Unleased Acreage of Blocks with Aliquots and Irregular Portions Under 
Lease or Deferred'' included in the Final NOS 208 Package.
    Areas not Available for Leasing: The following whole and partial 
blocks are not offered for lease in this lease sale:
    Blocks with bid decisions currently under appeal (although 
currently unleased, the bid decisions on the following blocks are under 
appeal and bids will not be accepted):
Mississippi Canyon (OPD NH16-10)
Block 943
West Delta Area (Leasing Map LA8)
Block 50

    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 (OPD 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 (OPD NG 15-08)
Whole Blocks: 239, 284, 331 through 341
Portions of Blocks: 151, 195, 196, 240, 241, 285 through 298, 342 
through 349

    Whole blocks and portions of blocks, which are adjacent to or 
beyond the United States Exclusive Economic Zone, in or adjacent to the 
area known as the Northern portion of the Eastern Gap. Please note that 
an additional one block setback is being deferred, starting with this 
Sale:
Lund South (OPD NG 16-07)
Whole Blocks: 128, 129, 169 through 173, 209 through 217, 248 through 
261, 293 through 305, and 349
Henderson (OPD NG 16-05)
Whole Blocks: 466, 508 through 510, 551 through 554, 594 through 599, 
637 through 643, 679 through 687, 722 through 731, 764 through 775, 807 
through 819, 849 through 862, 891 through 905, 933 through 949, and 975 
through 992

[[Page 2094]]

Portions of Blocks: 467, 511, 555, 556, 600, 644, 688, 732, 776, 777, 
820, 821, 863, 864, 906, 907, 950, 993, and 994
Florida Plain (OPD NG 16-08)
Whole Blocks: 5 through 23, 46 through 66, 89 through 109, 133 through 
153, 177 through 196, 221 through 239, 265 through 282, 309 through 
326, and 363 through 369
Portions of Blocks: 24, 25, 67, 68, 110, 111, 154, 197, 198, 240, 241, 
283, 284, 327, 370, and 371

    Whole blocks and portions of blocks deferred by Gulf of Mexico 
Energy Security Act:
Pensacola (OPD NH 16-05)
Blocks: 751 through 754, 793 through 798, 837 through 842, 881 through 
886, 925 through 930, 969 through 975
Destin Dome (OPD NH 16-08)
Whole 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 (OPD NH 16-11)
Whole Blocks: 1 through 15, 45 through 59, and 92 through 102
Portions of Blocks: 16, 60, 61, 89 through 91, 103 through 105, and 135 
through 147
Henderson (OPD NG 16-05)
Portions of Blocks: 114, 158, 202, 246, 290, 334, 335, 378, 379, 422, 
and 423
    Whole blocks and portions of blocks above the Sale 181 area but 
beyond 100 miles from the Florida coast:
DeSoto Canyon (OPD NH 16-11)
Whole Blocks: 148, and 185 through 192
Portion of Blocks: 89, 90, 91, 103 through 105, 141 through 147, 149, 
and 193

    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 Act 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 rate, minimum royalty, and royalty suspension 
provisions, if any, applicable to this sale are noted below. Depictions 
of related areas are shown on the map ``Final, Central Planning Area, 
Lease Sale 208, March 18, 2009, Lease Terms and Economic Conditions,'' 
for leases resulting from this lease sale.
    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: The 5-year initial period for a 
lease in water depths of less than 400 meters and 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 5-year initial period to be extended to 8 years, 
the lessee is 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.
    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'' which is contained in the Final NOS 
208 Package. Please note that bonus bids must be in whole dollar 
amounts (i.e., any cents will be disregarded by the MMS).
    Rental Rates: Rentals for leases issued in this sale are to be paid 
at the rental rates summarized in the following table on or before the 
1st day of each lease year until determination of well producibility is 
made, then at the expiration of each lease year until the start of 
royalty-bearing production.

                               Sale 208 Rental Rates per Acre or Fraction Thereof
----------------------------------------------------------------------------------------------------------------
             Water depth in meters               Years 1-5               Years 6, 7, & 8              Years 9-10
----------------------------------------------------------------------------------------------------------------
0 to <200.....................................        $7.00  $14.00, $21.00, & $28.00 (if a lease            N/A
                                                              extension is approved).
200 to <400...................................        11.00  $22.00, $33.00, & $44.00 (if a lease            N/A
                                                              extension is approved).
400 to <800...................................        11.00  $16.00 (if exploratory well drilled             N/A
                                                              per 30 CFR 256.37).
800+..........................................        11.00  $16.00................................       $16.00
----------------------------------------------------------------------------------------------------------------


[[Page 2095]]

    Escalating Rental Rates for leases with an approved extension of 
the initial 5-year period: Any lease in water depths less than 400 
meters and granted a 3-year extension beyond the 5-year initial period 
as provided above will pay an escalating rental rate as indicated in 
the previous table and 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 made, then at the expiration of each lease year until 
the start of royalty-bearing production. However, the escalating rental 
rates after the 5th year for blocks in up to 400 meters will become 
fixed and no longer escalate 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 has occurred. In this case the 
rental rate will become fixed at the rental rate in effect during the 
lease year in which the additional well was spudded.

------------------------------------------------------------------------
                                Escalating annual     Escalating annual
                                rental rate for a     rental rate for a
   Extended lease year No.     lease in: less than   lease in a: 200- to
                                a 200-meter water    less than 400-meter
                                      depth              water depth
------------------------------------------------------------------------
6...........................  $14.00 per acre or    $22.00 per acre or
                               fraction thereof.     fraction thereof.
7...........................  $21.00 per acre or    $33.00 per acre or
                               fraction thereof.     fraction thereof.
8...........................  $28.00 per acre or    $44.00 per acre or
                               fraction thereof.     fraction thereof.
------------------------------------------------------------------------

    Royalty Rate: 18\3/4\ 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 following the month during which the 
production is obtained.
    Minimum Royalty: $7.00 per acre or fraction thereof per year for 
blocks in water depths of less than 200 meters and $11.00 per acre or 
fraction thereof per year for blocks in water depths of 200 meters or 
deeper regardless of the year of the lease and notwithstanding any 
royalty relief volume. Minimum royalty is to be paid at the expiration 
of each lease year beginning in the year in which royalty bearing 
production commences, and continuing thereafter regardless of either 
the lease year or whether any royalty suspension may apply. A credit 
will be applied for any actual royalty paid on the lease during the 
lease year in which minimum royalty is owed on the lease. If the actual 
royalty paid on the lease for a given lease year exceeds the minimum 
royalty otherwise owed, then no minimum royalty payment is due.
    Royalty Suspension Provisions: Leases with royalty suspension 
volumes (RSV), are authorized under existing MMS rules at 30 CFR Parts 
203 and 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 EPAct05 extends existing deep gas incentives in 
two ways. First, it mandates a RSV of at least 35 billion cubic feet of 
natural gas for certain wells completed in a drilling depth category 
(20,000 feet TVD SS or deeper) for leases in 0 to less than 400 meters 
of water. Second, section 344 directs that RSV's no lower than those in 
shallower water (prior to the application of price thresholds) be 
applied to leases in 200 to less than 400 meters of water. Section 345 
of the Energy Policy Act of 2005 (EPAct05) directs continuation of the 
MMS deepwater incentive program utilized since 2001 in the GOM for 
leases issued between August 8, 2005, and August 8, 2010, and provides 
for an increase in RSV from 12 million barrels of oil equivalent 
(MMBOE) to 16 MMBOE for leases in water depths greater than 2,000 
meters.

Deep Gas Royalty Suspensions

    A lease issued as a result of this sale may be eligible for royalty 
relief for deep and ultra-deep wells mandated by section 344 of EPAct 
05. The MMS published a final rule in the November 18, 2008, Federal 
Register (73 FR 69490), Royalty Relief--Ultra-Deep Gas Wells and Deep 
Gas Wells on Leases in the Gulf of Mexico (Incentives for Natural Gas 
Production from Deep Wells in the Shallow Waters of the GOM) 
implementing section 344 of EPAct05. If a lease is eligible, it is 
subject to the provisions of this rule, including the price threshold 
provisions. The royalty relief is in the form of 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 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 are 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 granting 
RSV to leases entirely in water depths 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 to less than 400 meter water 
depth range issued in Sale 208 are eligible for royalty relief as 
prescribed in the final rule (73 FR 69490) 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 TVD SS or deeper) on leases entirely in 
water depths less than 400 meters issued in Sale 208 are eligible for 
the royalty relief as prescribed in the final rule (73 FR 69490) 
implementing section 344 of the EPAct05.

Deepwater Royalty Suspensions

    The following Royalty Suspension Provisions apply to deepwater oil 
and gas production:
    A lease issued as a result of this sale may be eligible for 
deepwater royalty relief mandated by section 345 of EPAct05. The 
following Royalty Suspension Provisions for deepwater oil and gas 
production apply to a lease issued as a result of this sale. These 
provisions are similar to, and mean the same as the language used in 
recent sales except for some clarifying text and updated examples. In 
addition to these provisions, and the EPAct05, refer to 30

[[Page 2096]]

CFR 218.151 and applicable provisions of sections 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 MMBOE800.
    800 meters to less than 1,600 meters: 9 MMBOE.
    1,600 meters to 2,000 meters: 12 MMBOE.
    Greater than 2,000 meters: 16 MMBOE.
    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 RSV.
    (a) The base level price threshold for light sweet crude oil is 
$36.39 per barrel in 2007. The adjusted oil price threshold in any 
subsequent calendar year is computed by changing the price threshold 
applicable in the immediately preceding calendar year 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 $4.55 per 
million British thermal units (MMBTU) in 2007. The adjusted gas price 
threshold in any subsequent calendar year is computed by changing the 
price threshold applicable in the immediately preceding calendar year 
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 implicit price deflator indicates that 
inflation is 3 percent in 2008, then the price threshold in calendar 
year 2008 would become $37.48 per barrel for oil and $4.69 for gas. 
Therefore, royalty on oil production in calendar year 2008 would be due 
if the average of the daily closing prices for the nearby delivery 
month on the NYMEX in 2008 exceeds $37.48 per barrel, and royalty on 
gas production in calendar year 2008 would be due if the average of the 
daily closing prices for the nearby delivery month on the NYMEX in 2008 
exceeds $4.69 per MMBTU.
    (d) The MMS provides 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, it will not be revised regardless of any 
subsequent adjustments in the implicit price deflator published by the 
U.S. Government for the preceding year. Information on price thresholds 
is available at the MMS Web site at: 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 RSV is exhausted, beginning on the first day of the month following 
the month in which the RSV is exhausted.
    Lease Stipulations: The map ``Final, Central Planning Area, Lease 
Sale 208, March 18, 2009, Stipulations and Deferred Blocks'' depicts 
the blocks on which one or more of 13 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, 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; (12) Below Seabed Operations on 
a Portion of Mississippi Canyon, Block 650 and (13) Below Seabed 
Operations on a Portion of Walker Ridge, Blocks 293 and 294.
    The texts of the stipulations are contained in the document ``Lease 
Stipulations, Central Planning Area, Oil and Gas Lease Sale 208, Final 
Notice of Sale'' included in the Final NOS 208 Package. In addition, 
the ``List of Blocks Available for Leasing'' contained in the Final NOS 
208 Package identifies for each block listed the lease stipulations 
applicable to that block.
    Information to Lessees: The Final NOS 208 Package contains an 
``Information to Lessees'' document that provides detailed information 
on certain specific issues pertaining to this proposed 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 208, not to be opened until 9 a.m., Wednesday, March 
18, 2009.'' 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 Final 
NOS 208 Package. 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 Final NOS 208 Package. A blank bid form has been 
provided for your convenience which may be copied and filled in.
    Please also refer to the Telephone Numbers/Addresses of Bidders 
Form included within the Final NOS 208 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 MMS published in the Federal Register a list of restricted 
joint bidders, which applies to this lease sale, at 73 FR 59649 on 
October 9, 2008. Please also refer to joint bidding provisions at 30 
CFR 256.41 for additional information. All bidders must execute all 
documents in conformance with signatory authorizations on file in the 
MMS Gulf of Mexico Region Adjudication Unit. Designated signatories 
must be authorized to bind their respective legal business entities 
(e.g., a corporation, partnership, or LLC) and must have an incumbency 
certificate setting forth the authorized signatories on file with the 
GOM Region Adjudication Office. Bidders submitting joint bids must 
include on 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

[[Page 2097]]

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 Final NOS 208 
Package).
    Withdrawal of Bids: Once submitted, bid(s) may not be withdrawn 
unless the RD receives a written request for withdrawal from the 
company who submitted the bid(s), prior to 10 a.m. on Tuesday, March 
17, 2009. This request must be typed on company letterhead and must 
contain the submitting company's name, its company number, the map 
name/number and block number of the bid(s) to be withdrawn. The request 
must be in conformance with signatory authorizations on file in the MMS 
Gulf of Mexico Region Adjudication Office. Signatories must be 
authorized to bind their respective legal business entities (e.g., a 
corporation, partnership, or LLC) and must have an incumbency 
certificate setting forth the authorized signatories on file with the 
MMS GOM Region Adjudication Office. The name and title of said 
signatory must be typed under the signature block on the withdrawal 
letter. Upon the RD's, or his designee's, approval of such requests, he 
will indicate his approval by affixing his signature and date to the 
submitting company's request for withdrawal.
    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 block 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 whole (rounded 
up) acreage. The bonus bid must be in whole dollar amounts (i.e., any 
cents will be disregarded by the MMS) and greater than or equal to the 
minimum bonus bid. The appropriate minimum bid per acre rate is applied 
to the whole (rounded up) acreage and the resultant calculation is 
rounded up to the next whole dollar amount if the calculation results 
in any cents. The minimum bonus bid calculation, including all 
rounding, is shown in the document ``List of Blocks Available for 
Leasing'' included in the Final NOS 208 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. All payments must be electronically 
deposited into an interest-bearing account in the U.S. Treasury 
(account information provided in the Electronic Funds Transfer (EFT) 
instructions) by 11 a.m. Eastern Time the day following bid reading. 
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 208, 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/208/cgom208.html. 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 titleholder 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 Final NOS 208 
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 bidder 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 Gulf of Mexico 
Region 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 2 CFR Parts 180 and 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 Part 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 208, or participating as a joint bidder in such a bid, 
must submit a Geophysical Data and Information Statement (GDIS) 
identifying any enhanced or reprocessed geophysical data and 
information generated or used as part of the decision to bid or 
participate in a bid on the block. The data identified in the GDIS 
should clearly identify whether the data or information are non-
exclusive data sets available from geophysical contractors or exclusive 
data specially processed for

[[Page 2098]]

or by bidders. In addition, the GDIS should clearly identify the data 
type (2-D or 3-D, pre-stack or post-stack and time or depth); data 
extent (i.e., number of line miles for 2D or number of blocks for 3D) 
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 information and data 
listed and available for 30 days post-sale, the processing company, 
date processing completed, owner of the original data, original data 
survey name and permit number. The MMS reserves the right to query 
about alternate data sets and to quality check and compare the listed 
and alternative data sets to determine which data set most closely 
meets the needs of the fair market value determination process.
    The statement must also identify each block upon which a bidder 
bid, or participated in a bid, but for which it did not use processed 
or reprocessed pre- or post-stack geophysical data and information as 
part of the decision to bid or to participate in the bid. The GDIS must 
be submitted, even if no enhanced geophysical data and information were 
used for bid preparation of the tract.
    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) provided via Web site 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.
    Please also refer to the Final NOS 208 Package for more detail 
concerning submission of the GDIS, making the data available to the MMS 
following the lease sale, preferred format, reimbursement for costs, 
and confidentiality.
    Force Majeure: The Regional Director of the MMS Gulf of Mexico 
Region has the discretion to change any date, time, and/or location 
specified in the Final NOS 208 Package in case of a force majeure event 
which the Regional Director deems may interfere with the carrying out 
of a fair and proper lease sale process. Such events may include, but 
are not limited to, natural disasters (e.g., earthquakes, hurricanes, 
floods), wars, riots, acts of terrorism, fire, strikes, civil disorder 
or other events of a similar nature. In case of such events, bidders 
should call (504) 736-0557 or access our Web site at: https://
www.gomr.mms.gov for information about any changes.

    Dated: January 6, 2009.
Randall B. Luthi,
Director, Minerals Management Service.
[FR Doc. E9-695 Filed 1-13-09; 8:45 am]
BILLING CODE 4310-MR-P