The multiple is less than half that of onshore U.S. unconventional-resource portfolios. With one simple multiple, "3-4x," Bill Marko explains just how depressed asset valuations for deepwater Gulf of Mexico assets are these days. The figure is how much public-stock investors will pay for these properties within E&P companies' portfolios: three to four times EBITDA. That's in contrast with 8x to 10x EBITDA at which investors are valuing onshore U.S. unconventional-resource plays, he says, and is less than an overall multiple of 5x to 7x for large-cap E&P companies in general. Marko, managing director, energy M&A, for Jefferies & Co., addressed more than 500 attendees at Oil and Gas Investor and A&D Watch's 11th annual A&D Strategies and Opportunities conference in Dallas recently. Since the Macondo incident in the Gulf in April 2010, "the increased regulatory environment, risk of deepwater operations, and size and timing of deepwater development are causing reconsideration of deepwater strategies," he says. In more than two years since Macondo, there have been only a handful of deals for Gulf assets, including a few that had been signed prior to April 2010 and subsequently closed on schedule. The highest-profile new deal involved shallow-Gulf assets, with Oklahoma-focused SandRidge Energy Inc. buying Dynamic Offshore Resources LLC this year, sweeping the private-equity-backed producer off the IPO market. And, what a bargain it was, according to Tom Ward, SandRidge chairman and chief executive officer. Ward told attendees at Oil and Gas Investor's Energy Capital Conference in June, "The idea of us getting into the Gulf of Mexico was just a dislocation of the market. Post-Macondo, oil in the Gulf of Mexico was selling at a discount to what we could buy it for onshore the U.S." (See senior editor Steve Toon's report.) Interest in Gulf leases is strong since lease-sales have resumed post-moratorium. Marko notes that the June 2012 Central Gulf sale was the third largest in history; the first- and second-largest were in 2008 and 2007, respectively, as oil prices were heading to $150 and natural gas above $10. Tudor, Pickering, Holt & Co. Securities Inc. analysts reported after the 2012 sale, "The bidding was dominated by supermajors as the Top 5 accounted for 74% of total winning bids versus 48% in the March 2010 auction-with two supermajors in the Top 5 (at the time)." But bids for shallow Gulf leases were weak this past June. "Shallow-water (acreage) received lots of attention, but operators were not paying up for it. Compared with the March 2010 lease sale, shallow water showed an increase of 28% in blocks receiving bids, but the price per acre declined from $118 to $102... "The (shallow-water) bidding activity suggests lots of interest-if the price is right." -Nissa Darbonne, Editor-at-Large, Oil and Gas Investor, OilandGasInvestor.com, Oil and Gas Investor This Week, A&D Watch, A-Dcenter.com, UGcenter.com. Contact Nissa at ndarbonne@hartenergy.com.