USG lease sale delay may offer more opportunity: seismic provider

Houston (Platts)--30Oct2006

Although many exploration and production companies had been planning to
bid in the US Minerals Management Service's canceled Central Gulf of Mexico
Lease Sale 201, many may actually be "relieved" at the cancellation because it
gives them more time to prepare for another sale later in 2007, the CEO of a
top global seismic data company said Monday.

Hank Hamilton, CEO of TGS-NOPEC Geophysical, noted during a conference
call that the the same Central Gulf properties are to be offered in Lease Sale
205, which is expected to be held in September.

Lease Sale 201 had been scheduled for March, but MMS scrapped it owing to
a settlement last week with the state of Louisiana. The settlement prevents
MMS from holding lease sales in the US Gulf until it prepares an environmental
impact statement that takes into account effects on the state's coastline from
hurricanes Katrina and Rita in 2005.

MMS spokespeople last week told Platts the September Central Gulf sale
will include the parcels from the canceled sale and that a Western Gulf sale
will be held in August.

"We've heard from a few customers about this, and have heard from some
high level exploration managers that they're somewhat relieved the sale will
be delayed," Hamilton said. "It gives them more time to prepare."

Moreover, with the Central Gulf sale scheduled until September, it could
potentially contain much more available acreage than it would have in March
because of expiring leases in the meantime, he said. More than a thousand
leases are set to expire between now and 2008, and some of these expirations
will occur in April through August.

Hamilton said TGS officials talked to MMS officials early Monday about
the timeline. "They don't know how long it will take them to do the
environmental assessment" that is required prior to the Central Gulf sale, he
said. But the September timeline for the sale "seemed logical to them."

--Starr Spencer, starr_spencer@platts.com

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