MMS rakes in $ 537 mm from Gulf of Mexico RIK gas sale

Oct 27, 2008 01:00 AM

More than 76 bn cf of natural gas was sold to six companies as part of a Royalty in Kind (RIK) Gulf of Mexico gas sale conducted this month by the Department of the Interior's Minerals Management Service (MMS).
Approximately 76 bn cf of natural gas, or 241,000 mm Btu per day, was sold under 5- or 12-month contracts with delivery scheduled to begin Nov. 1, 2008. The 76 bn cf of gas is enough to supply the average gas needs of nearly 1 mm US homes for one year.

If natural gas prices in the Gulf remain in the area of $ 7 per mm Btu, the sale will equate to more than $ 537 mm in total gross revenues. Actual revenues will vary based on natural gas prices over the life of the contracts.
The gas sold in the RIK sale involves an aggregation of royalties taken "in kind" in the form of product, rather than "in value" or cash payments, from gas production in the Gulf of Mexico. MMS then sells the gas competitively on the open marketplace with the goals of increasing revenues, improving government efficiencies, and shortening the compliance cycle.

Winning bidders on the gas are ConocoPhillips, Shell Energy North America, United Energy Trading, J.P. Morgan Chase, Williams Gas Marketing, and National Energy and Trade.
The Royalty in Kind Program began as a pilot program more than 10 years ago and is designed to ensure a fair return on the public's royalty assets. In Fiscal Year 2007, the program was credited with providing taxpayers and the Federal Government an additional $ 63 mm in benefits. From Fiscal Years 2004 through 2007, the program has generated additional benefits to the Government of approximately $ 150 mm.

The approximately 76 bn cf of gas sold during this sale is based on average volumes of gas produced prior to Hurricane Ike.
Actual volumes sold may vary as gas that was shut-in because of the hurricane is restored to production and delivered to market centres.

Source / MMS
Alexander's Commentary

Change of face - change of phase

In the period of July 20 till August 3, 2015, Alexander will be out of the office and the site will not or only irreg

read more ...
« September 2020 »
1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30

Register to announce Your Event

View All Events