Studies which assess profitabilities from Federal offshore oil and gas leases consistently point to unsatisfactory performance. That is true for leases issued years ago as well as for the future even with presently optimistic oil and gas price projections. Bonus paid is the controllable factor that delivers the coup de grace to acceptable profits. Elimination of bonus may not make profitabilities robust, but could make them closer to the average for all industries. This review leads to a simple prescription. For profitabilities closer to a satisfactory level, hid less bonus.

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