Byron Energy is the operator and 50-100% working interest holder of a number of blocks in the Gulf of Mexico prospective for oil and gas. The executive team is experienced with a track record of growing shareholder wealth in the region.
Gulf of Mexico
Since inception, Byron has focused solely on the shallow waters on the OCS in the Gulf of Mexico. The Company intends to remain focussed on the Gulf of Mexico region, primarily in OCS waters. The Directors believe that the shallow waters of the Gulf of Mexico offer significant advantages to the Company as they believe the Gulf of Mexico:
- is a prolific producer of oil and gas;
- has significant proved and unproved reserves of oil and gas as well as significant potential for further hydrocarbon discoveries;
- has extensive established and accessible oil and gas exploration, development and production infrastructure; and
- offers a short development cycle and rapid payback, and with the advantages of:
- recently produced regional 3D seismic coverage over fields and prospects, available for purchase from third party providers;
- a well-established and stable administration with one landowner, BOEM; and
- has regular lease sales conducted by BOEM with 5,000 acre blocks available, generally to the highest bidder, to lease for five years at US$7 per acre per annum.
The Gulf of Mexico is a region of high exploration drilling success rates. The area is gridded into 5,000 acre leases that are available to be acquired through bidding at the annual federal lease sales. Acquired leases are held for a five year term with the only commitment being a yearly US$7 per acre rental. At the end of the five year term, the lease either is returned to the US federal government or is retained through being converted to a production lease following the discovery and development of commercial gas and/or oil reserves. There is a royalty of up to 18.75% on production from the shallow waters paid to the US federal government and the lease is retained until production ceases. Other items that add to the commercial attractiveness of the Gulf of Mexico are the existence of extensive and accessible oil and gas pipelines, an extensive drilling and production service company presence, the availability of area wide 3D seismic databases and well log and production history data bases for wells drilled in the area.
The western and central Gulf of Mexico, which includes offshore Texas, Louisiana, Mississippi, and Alabama, is one of the major petroleum-producing areas of the United States. The Gulf of Mexico offshore region accounts for about 5% of America’s domestic gas production and about 17% of America’s domestic oil production. Total oil production from the Gulf of Mexico OCS leases for 2018 was 647 MMBbls and total gas production was 992 Bcf. As of 1 May 2019 there were 2,491 active executed leases in the Gulf of Mexico over 13,170,956 acres. Of these leases 747 were producing leases and 1,744 were non-producing leases. Total acreage of the producing leases was 13,170,956 acres and the acreage of non-producing leases was 9,465,131 acres. The offshore areas of the United States are estimated to contain significant quantities of resources in yet-to-be-discovered fields. BOEM estimates of technically recoverable oil and gas resources in undiscovered fields on the OCS (2016, mean estimates) total 90,550 MMBbls of oil and 328 Tcf of gas. |