Federal Register / Vol. 79, No. 201 / Friday, October 17, 2014 / Notices 62463 

estimation of the underlying economic 

value of these tracts. In such cases, the 

resulting economic value determined by 

BOEM could be sufficient to lead to a 

decision to reject the high bid. In a 

subset of these cases, the resulting 

rejection and subsequent reoffering of 

the tract in the next sale might produce 

a considerable increase in lease 

revenues. 

Once a tract is accepted under the 

Number of Bids Rule, BOEM does not 

commonly conduct an economic 

evaluation of that tract, so it cannot 

know with certainty whether such an 

evaluation would have led to the 

rejection of the high bid. Additionally, 

since the tract is not rejected, BOEM 

does not have empirical data revealing 

what a subsequent high bid would have 

been if the tract’s original high bid had 

been rejected and the tract reoffered in 

the next sale. 

Nevertheless, BOEM identified 

several recent instances where the 

Number of Bids Rule fell slightly short 

of accepting the high bid, and the 

affected tracts were subsequently 

rejected after BOEM conducted its 

economic evaluations and applied its 

Bid Adequacy Procedures in Phase 2. In 

a few of these cases, BOEM found that 

upon reoffering, the high bids on the 

actual previously rejected tracts rose 

substantially. But, had the nature of the 

actual bidding varied only slightly 

among competing bidders, BOEM might 

have accepted the original high bids 

under the Number of Bids Rule, and by 

doing so would have thereby 

inadvertently forgone the additional 

cash bonus bid amounts it received 

upon the actual reoffering of those tracts 

with rejected high bids. Ensuring that 

the American taxpayer receives fair and 

appropriate value is an important goal 

of the proposed procedural change. 

What concerns may exist about possibly 

removing the Number of Bids Rule? 

The removal of the Number of Bids 

Rule eliminates reliance by BOEM on 

certain competitive market forces in the 

determination of FMV in Phase 1. 

However, BOEM will continue to 

consider competitive market forces in 

making bid adequacy determinations 

through application of the RAM in 

Phase 2. Beginning in 2000, BOEM has 

accepted through application of the 

RAM criterion, approximately twothirds of both the number and high bid 

amounts of Confirmed and Wildcat 

Tracts with the following 

characteristics: Received three or more 

Qualified Bids, were passed to Phase 2, 

and, had high bids less than the 

applicable tract’s MROV. This finding 

confirms that even without the Number 

of Bids Rule, BOEM will continue to 

capture the effects of competitive 

market forces in its Bid Adequacy 

Procedures because the RAM is retained 

as part of those revised procedures. The 

RAM is an effective means for 

incorporating market forces in BOEM’s 

Bid Adequacy Procedures and is 

unaffected by the proposed change in 

those procedures. 

How would this proposed procedural 

change affect the content of phase 1 & 

phase 2 of the Bid Adequacy 

Procedures? 

Under current procedures, certain 

tracts may have their high bids accepted 

in Phase 1 if they are (1) subjected to 

and pass the Number of Bids Rule, or (2) 

determined to be non-viable by BOEM. 

All other tracts are sent to Phase 2 for 

further evaluation. Removing the 

Number of Bids Rule will eliminate 

category (1) above. Henceforth, only the 

high bids on Confirmed and Wildcat 

Tracts determined by BOEM to be nonviable may be accepted in Phase 1. 

Moreover, elimination of the Number of 

Bids Rule will not affect any existing 

evaluation procedures and criteria 

employed in Phase 2. 

BOEM does not intend to make any 

other substantive changes to the Bid 

Adequacy Procedures at this time. If the 

proposed change in procedures or some 

variation thereof is adopted, BOEM 

intends to publish the complete and 

revised Bid Adequacy Procedures prior 

to, or in conjunction with, the Central 

Gulf of Mexico Planning Area Lease 

Sale 235 Final Notice of Sale in early 

2015. 

Questions for Respondents 

1. Will removing the Number of Bids 

Rule alter your typical bidding 

behavior? 

2. What adverse effects do you 

envision from removing the Number of 

Bids Rule? 

3. Can you offer any alternatives or 

refinements for ensuring receipt of FMV 

that you deem superior to removing the 

Number of Bids Rule? 

Dated: October 14, 2014. 

Walter D. Cruickshank, 

Acting Director, Bureau of Ocean Energy 

Management. 

[FR Doc. 2014–24727 Filed 10–16–14; 8:45 am] 

BILLING CODE 4310–MR–P 

DEPARTMENT OF THE INTERIOR 

Bureau of Ocean Energy Management 

[MMAA 104000] 

Notice of Availability of the Proposed 

Notice of Sale (NOS) for Central Gulf of 

Mexico Planning Area (CPA) Outer 

Continental Shelf (OCS) Oil and Gas 

Lease Sale 235 (CPA Sale 235) 

AGENCY: Bureau of Ocean Energy 

Management (BOEM), Interior. 

ACTION: Notice of availability of the 

proposed notice of CPA Sale 235. 

SUMMARY: BOEM announces the 

availability of the Proposed NOS for 

proposed CPA Sale 235. This Notice is 

published pursuant to 30 CFR 556.29(c) 

as a matter of information to the public. 

With regard to oil and gas leasing on the 

OCS, the Secretary of the Interior, 

pursuant to section 19 of the OCS Lands 

Act, provides affected States the 

opportunity to review the Proposed 

NOS. The Proposed NOS sets forth the 

proposed terms and conditions of the 

sale, including minimum bids, royalty 

rates, and rental rates. 

DATES: Affected States may comment on 

the size, timing, and location of 

proposed CPA Sale 235 within 60 days 

following their receipt of the Proposed 

NOS. The Final NOS will be published 

in the Federal Register at least 30 days 

prior to the date of bid opening. Bid 

opening currently is scheduled for 

March 18, 2015. 

SUPPLEMENTARY INFORMATION: The 

Proposed NOS for CPA Sale 235 and a 

Proposed NOS Package containing 

information essential to potential 

bidders may be obtained from the Public 

Information Unit, Gulf of Mexico 

Region, Bureau of Ocean Energy 

Management, 1201 Elmwood Park 

Boulevard, New Orleans, Louisiana 

70123–2394. Telephone: (504) 736– 

2519. The Proposed NOS and Proposed 

NOS Package also are available on 

BOEM’s Web site at http://

www.boem.gov/Sale-235/. 

Agency Contact: Robert Samuels, 

Chief, Leasing Division, 

Robert.Samuels@boem.gov. 

Dated: October 14, 2014. 

Walter D. Cruickshank, 

Acting Director, Bureau of Ocean Energy 

Management. 

[FR Doc. 2014–24729 Filed 10–16–14; 8:45 am] 

BILLING CODE 4310–MR–P 

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