[Federal Register Volume 72, Number 139 (Friday, July 20, 2007)]
[Notices]
[Pages 39832-39837]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-14114]


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DEPARTMENT OF THE INTERIOR

Minerals Management Service


Outer Continental Shelf (OCS) Western Gulf of Mexico (GOM) Oil 
and Gas Lease Sale 204

AGENCY: Minerals Management Service.

ACTION: Final Notice of Sale (FNOS) 204.

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SUMMARY: On August 22, the MMS will open and publicly announce bids 
received for blocks offered in Western GOM Oil and Gas Lease Sale 204, 
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 204 Package (FNOS 204 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, August 22, 
2007, in the Grand Salon Suite B at the Hilton New Orleans Riverside 
Hotel, Two Poydras 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 204 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 http://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, August 21, 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 204. 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. 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, August 21, 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

[[Page 39833]]

Western GOM Oil and Gas Lease Sale 204'' included in the FNOS 204 
Package. All of these blocks are shown on the following Leasing Maps 
and Official Protraction Diagrams:

Outer Continental Shelf Leasing Maps--Texas Map Numbers 1 Through 8 
(These 16 Maps Sell for $2.00 Each.)

TX1 South Padre Island Area (revised November 1, 2000).
TX1A South Padre Island Area, East Addition (revised November 1, 2000).
TX2 North Padre Island Area (revised November 1, 2000).
TX2A North Padre Island Area, East Addition (revised November 1, 2000).
TX3 Mustang Island Area (revised November 1, 2000).
TX3A Mustang Island Area, East Addition (revised September 3, 2002).
TX4 Matagorda Island Area (revised November 1, 2000).
TX5 Brazos Area (revised November 1, 2000).
TX5B Brazos Area, South Addition (revised November 1, 2000).
TX6 Galveston Area (revised November 1, 2000).
TX6A Galveston Area, South Addition (revised November 1, 2000).
TX7 High Island Area (revised November 1, 2000).
TX7A High Island Area, East Addition (revised November 1, 2000).
TX7B High Island Area, South Addition (revised November 1, 2000).
TX7C High Island Area, East Addition, South Extension (revised November 
1, 2000).
TX8 Sabine Pass Area (revised November 1, 2000).

Outer Continental Shelf Leasing Maps--Louisiana Map Numbers 1A, 1B, and 
12 (These 3 Maps Sell for $2.00 Each.)

LA1A West Cameron Area, West Addition (revised February 28, 2007).
LA1B West Cameron Area, South Addition (revised February 28, 2007).
LA12 Sabine Pass Area (revised February 28, 2007).

Outer Continental Shelf Official Protraction Diagrams (These 7 Diagrams 
Sell for $2.00 Each.)

NG14-03 Corpus Christi (revised November 1, 2000).
NG14-06 Port Isabel (revised November 1, 2000).
NG15-01 East Breaks (revised November 1, 2000).
NG15-02 Garden Banks (revised February 28, 2007).
NG15-04 Alaminos Canyon (revised November 1, 2000).
NG15-05 Keathley Canyon (revised February 28, 2007).
NG15-08 Sigsbee Escarpment (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. These GOM Leasing Maps and Official Protraction 
Diagrams are also available for free online in .pdf and .gra format 
at http://www.gomr.mms.gov/homepg/lsesale/map_arc.html.

    For the current status of all Western GOM Leasing Maps and Official 
Protraction Diagrams, please refer to 66 FR 28002 (published May 21, 
2001), 67 FR 60701 (published September 26, 2002), and 72 FR 27590 
(published May 16, 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 204'' included in the FNOS 204 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 ``Western Gulf of Mexico Lease Sale 204--
Unleased Split Blocks and Available Unleased Acreage of Blocks with 
Aliquots and Irregular Portions Under Lease or Deferred'' included in 
the FNOS 204 Package.
    Areas Not Available For Leasing: The following whole and partial 
blocks are not offered for lease in this sale:
    Block currently under appeal (although currently unleased, the 
following block is under appeal and bids will not be accepted:

High Island (Area TX7)

    Block 21.
    Whole blocks and portions of blocks which lie within the boundaries 
of the Flower Garden Banks National Marine Sanctuary at the East and 
West Flower Garden Banks and Stetson Bank (the following list includes 
all blocks affected by the Sanctuary boundaries):

High Island, East Addition, South Extension (Area TX7C)

    Whole Blocks: A-375, A-398.
    Portions of Blocks: A-366, A-367, A-374, A-383, A-384, A-385, A-
388, A-389, A-397, A-399, A-401.
    High Island, South Addition (Area TX7B)
    Portions of Blocks: A-502, A-513.
    Garden Banks (Area NG15-02)
    Portions of Blocks: 134, 135.
    Whole blocks and portions 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:

Keathley Canyon (Map Number NG15-05)

    Portions of Blocks: 978 through 980.

Sigsbee Escarpment (Map Number NG15-08)

    Whole Blocks: 11, 57, 103, 148, 149, 194.
    Portions of Blocks: 12 through 14, 58 through 60, 104 through 106, 
150.
    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 204, Final'' for leases resulting from this lease sale.

    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 ``Lease Terms and Economic 
Conditions, Lease Sale 204, 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

[[Page 39834]]

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 initial 5-year term. The 3-year extension may be 
granted in cases where the well is drilled to a target below 25,000 TVD 
SS and also in cases where the well does not reach a depth below 25,000 
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 operational 
reasons such as safety or mechanical problems encountered that 
prevented the well from reaching a depth below 25,000 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 will be contained in the FNOS 
204 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
                            Escalating annual      rental rate\*\ for a
  Extended lease year     rental rate\*\  for a    lease in: 200 to less
         number          lease in: less than 200   than 400 meters water
                            meters water depth             depth
------------------------------------------------------------------------
6......................  $12.50 per acre or       $19.00 per acre or
                          fraction thereof.        fraction thereof.
7......................  $18.75 per acre or       $28.50 per acre or
                          fraction thereof.        fraction thereof.
8......................  $25.00 per acre or       $38.00 per acre or
                          fraction thereof.        fraction thereof.
------------------------------------------------------------------------
\*\ If another well is spudded during the 3-year extended term of the
  lease and 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
  this 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 
not withstanding any royalty suspension that 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 (RSV), 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 (EPAct05) extends existing deep gas incentives in 
two ways. First, it mandates a 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 directed 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 directed 
continuation of the MMS deepwater 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 the MMS rule-specified 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 rule implementing this section of the EPAct05. If 
this lease is eligible, it will be subject to the provisions of that 
final rulemaking, including any price

[[Page 39835]]

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 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. Royalty Suspension Provisions will 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 204 will be eligible for royalty relief prescribed in the final 
rulemaking implementing section 344 of the EPAct05.
    C. Royalty Suspension Provisions will 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 204 will be eligible 
for royalty relief prescribed in a final rulemaking implementing 
section 344 of the EPAct05.

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. 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, 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.
    (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 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 (http://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 204, Final'' lists those blocks on which one or more of five 
lease stipulations apply: (1) Topographic Features; (2) Military Areas; 
(3) Operations in the Naval Mine Warfare Area; (4) Law of the Sea 
Convention Royalty Payment; and (5) Protected Species.

    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 204, Final'' map.

    The texts of the stipulations are contained in the document ``Lease 
Stipulations for Oil and Gas Lease Sale 204, Final'' included in the 
FNOS 204 Package. In addition, the ``List of Blocks Available for 
Leasing'' which will be contained in the FNOS 204 Package will identify 
for each block listed the lease stipulations applicable to that block.
    Information To Lessees: The FNOS 204 Package contains an 
``Information To Lessees'' document that 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 204, not to be opened until 9 a.m., Wednesday, 
August 22, 2007.'' The submitting company's name, its GOM Company 
number, the map name, map

[[Page 39836]]

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 204 Package. Please also refer to the Telephone Numbers/
Addresses of Bidders Form included within the FNOS 204 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 204 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 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 204 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 acreage amount 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 whole non-decimal (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 204'' included in the FNOS 204 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 
204, following the detailed instructions contained in the document 
``Instructions for Making EFT Bonus Payments'' which can be found on 
the MMS Web site at http://www.gomr.mms.gov/homepg/lsesale/204/wgom204.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 development 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 204 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 
http://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, 
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

[[Page 39837]]

geophysical data and information collected under a permit in the OCS.
    Every bidder submitting a bid on a block in Sale 204, 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 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 http://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 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: July 13, 2007.
Walter D. Cruickshank,
Acting Director, Minerals Management Service.
 [FR Doc. E7-14114 Filed 7-19-07; 8:45 am]
BILLING CODE 4310-MR-P