US DOE loans Arena Energy $480 million for Project Elkhorn in US Gulf
The U.S. Department of Energy has announced the financial close of a $480 million loan for Arena Energy’s Project Elkhorn in the US Gulf of Mexico.
The multi-year brownfield redevelopment will modernize 22 existing offshore platforms in the Southern Eugene Island area off the coast of Louisiana, a program that is designed to increase Arena Energy’s oil and natural gas production across the continental shelf.
Project Elkhorn will focus on refurbishment, repowering, retooling, replacement, and relocation of platforms; processing and compression upgrades; expansion of production and water-handling capacity; return of idled platforms to service; and development of new subsea natural gas pipeline infrastructure to improve midstream connectivity for future wells.
Financing is structured in up to five tranches through 2030.
Future development drilling, routine operations, plugging and abandonment, and decommissioning remain outside the financed scope, with Bureau of Ocean Energy Management (BOEM) and Bureau of Safety and Environmental Enforcement (BSEE) retaining full regulatory authority.
At peak production, the project is expected to add up to 38,600 barrels of oil per day and up to 77 million cubic feet of natural gas per day.
Over the life of the project, it is projected to deliver approximately 125 million barrels of oil and 250 billion cubic feet of natural gas, generating an estimated $1.6 billion in additional federal royalties.
Arena Energy currently produces approximately 30,000 barrels of oil per day offshore in the shallow water and shelf regions of the US Gulf.
Arena says that it will execute the work with long-standing partners White Fleet Drilling and Rosefield Pipeline.
“Arena was founded on the belief that the mature fields of the Gulf Shelf still hold vast potential, and Project Elkhorn is a critical part of that strategy,” said Mike Minarovic, CEO and Founder of Arena Energy.
Minarovic added: “The Southern Eugene Island area is one of the most prolific oil-producing regions in American history, and its infrastructure still has decades of productive life ahead. What it needed was long-term capital to match the opportunity. This financing lets us put existing infrastructure back to work, develop proved reserves, and keep producing reliable barrels here at home.”
About the Author
Bruce BeaubouefBruce Beaubouef
Senior Lead Reporter / Managing Editor
Bruce Beaubouef is Managing Editor for Offshore magazine. In that capacity, he plans and oversees content for the magazine; writes features on technologies and trends for the magazine; writes news updates for the website; creates and moderates topical webinars; and creates videos that focus on offshore oil and gas and renewable energies. Beaubouef has been in the oil and gas trade media for 25 years, starting out as Editor of Hart’s Pipeline Digest in 1998. From there, he went on to serve as Associate Editor for Pipe Line and Gas Industry for Gulf Publishing for four years before rejoining Hart Publications as Editor of PipeLine and Gas Technology in 2003. He joined Offshore magazine as Managing Editor in 2010, at that time owned by PennWell Corp. Beaubouef earned his Ph.D. at the University of Houston in 1997, and his dissertation was published in book form by Texas A&M University Press in September 2007 as The Strategic Petroleum Reserve: U.S. Energy Security and Oil Politics, 1975-2005.
