In order to grow and expand, it’s often important for a business to find the right location, have the right supplies and have clients willing and ready to buy their product or service. Sometimes, however, the right commercial real estate may not be available for purchase by the business from its owners. In these situations, other real estate transactions can be negotiated to suit the needs of all parties, such as a lease agreement.
One example of this situation is the recent lease sale offered by the federal government. During this sale, the federal government offered land to lease just off the shore of Louisiana and several other Gulf States to companies who want to explore the land for oil. The sale was only the second of its kind since 2010 and was held at Louisiana’s Superdome.
The sale included 39 million acres of land in the Gulf of Mexico. The government received 593 bids from 56 different companies. In total, there was $2.6 billion worth of bids placed for 454 tracts of land. The highest individual bid was made by Statoil Gulf of Mexico for $157 million. The highest number of bids was made by Shell Oil, which placed bids on 24 tracts at a total value of more than $406 million.
Officials from the U.S. Department of the Interior and many businesses were pleased with the outcome of the lease sale. Businesses and elected officials both hope that the Obama administration will continue to support similar prospective lease agreements through sales in the future, as further approvals are necessary for them to be finalized.
This lease sale is just the first step in allowing companies to drill for oil off Louisiana’s shores. Like all commercial real estate transactions, this lease sale is complex, can take some time and may include some regulatory obstacles. No doubt, lawyers and other company officials will work tirelessly to try and complete these transactions to the benefit of all those involved.
Source: Tri-Parish Times, “Gulf lease sale draws interest, opinions,” Mike Nixon, June 26, 2012