BSEE affords many freedoms to the leasees and operators to bring about and Maintain an (SOP) Suspension of Production for restoring production, in my opinion.
This is evident in BSEE’s May 7, 2019 “Notice to Leasees and Operators of Federal oil and gas leases in the OCS GOM”:
Excerpt 1 from May 7, 2019 Doc.
“Production from each lease will likely occur sooner than if the tract were Re-leased.”
(Page 4, 1st. Bullet Point)
Excerpt 2 from May 7, 2019 Doc.
1/31/2020 is the “Initial SOP” (Page 3, Line 13) on lease G35193 VR 375.
Excerpt 3 from May 7, 2019 Doc.
“We set the length of the SOP approval based on the circumstances of each individual case.” “We usually grant an SOP through an upcoming Major Milestone such as the next scheduled lease-holding operation, even though the activity scheduled may extend beyond the length of the SOP.” “We monitor your progress toward meeting each milestone in your activity schedule via your progress reports.”
Opinion:
BSEE can extend the “Initial SOP” (Page 3, Line 13) due to all the Vermillion 375 BSEE Milestones (Drilling, Completion, Platform Facilitates, Production). Remember, there are ongoing classified interactions between BSEE and the Operator that the public is not privy to.
Important Fact:
The (CRS) Congressional Research Service “2019-2024 (DPP) Draft Proposed Program report proposes two region-wide lease sales for each year 2019-2022, and would add a third sale specifically for the Eastern & Central GOM in 2023-2024.” The Central GOM is where Gulfslope’s fields are currently located, so this could allow for more flexibility and opportunities.
I think the CRS 2019-2024 DPP report accounts for several things, a few being:
1) Boosting the United States oil and gas Production and Reserves by increasing drilling opportunities for the Leasees and Operators. This is consistent with the “April 28, 2017 Executive Order America-First Offshore Energy Strategy” outlining “the U.S. from simply aspiring for energy independence to attaining energy dominance”
2) Increasing governmental revenues by assisting in the “maintaining of BOEM leases” with the older Royalty Rate of 18.75%.
3) BSEE choosing the most “revenue-generating” and “cost-effective” decisions for its organization. (i.e. Above Excerpt 1 from May 7, 2019 Doc) “ Production from each lease will likely occur sooner than if the tract was Re-leased”
4) Implementing favorable Leasing Regulations for the Leasees and Operators. ( i.e. increasing the “Initial SOP” extension from 180 days to one year). The recent administration increased the timeline allowing for more complicated cases to be actualized, thereby allowing for more U.S. Production and Reserves to be realized.
I still trust that the past four months have been part of the ongoing process of bringing the Corvette and Tau to fruition by the Gulfslope team. Looking forward to more “good things” this month.
Recent $/Barrel Data as of October 3, 2019:
”Louisiana Light” at $55.49 per barrel, % change -.5
Gulfslope’s NPV10, IRR, ROI, and pay back period assumes flat pricing of $55 per barrel.
(Source: eia.gov, Petroleum & Other Liquids Data Page) and
(Source: Gulfslope’s September 2019 Investor Block, Page 8, Bottom of Page)
Smith
