Gulf of America lease map: 199 oil and gas leases were wrongfully acquired for carbon disposal purposes. At Sale 261, Repsol acquired 36 nearshore Texas tracts in the Mustang Island and Matagorda Island areas (red blocks at the western end of the map above). Exxon had acquired 163 nearshore Texas tracts (blue in map above) at Sales 257 (94) and 259 (69).
As expected, the carbon disposal era in Federal offshore waters is ending before it began, and rightfully so.
Energy Intelligence is reporting that Exxon is relinquishing “more than 160 leases” in nearshore Federal waters off Texas. The actual number of oil and gas leases that the company improperly acquired for carbon disposal purposes is 163 (map above).
The reason being cited for the lease relinquishments is that the Dept. of the Interior has shelved regulations for carbon disposal on the OCS. Kudos to the DOI officials responsible for that decision. Carbon disposal has the support of no one except the companies that hope to profit from it. Further, there is no scenario under which Interior could have allowed these wrongfully acquired oil and gas leases to be converted to carbon disposal leases.
Now that these carbon disposal leases are being relinquished, it would be nice to see Exxon start acquiring OCS oil and gas leases for their intended purposes. Exxon and Mobil are historic Gulf operators who were once important contributors to the success of the OCS program.
Per the preliminary EIA data for April, Gulf of America OCS facilities produced an average of 2.107 million bopd in April. This surpasses the previous record of 2.060 million bopd set in January.
Meanwhile, the Sable bump is now evident in the EIA’s Pacific OCS production data with a ~50% March-April increase from January-February. A bigger increase should be apparent when the May numbers are posted. How will Sable fare in the upcoming court battles?
Gulf of America flaring and venting data for 2019-2025 are summarized in the attached table.The preferred performance indicators are the percentages of produced gas that are flared and vented both for oil-well gas (OWG, also known as associated or casinghead gas) and gas-well gas (GWG or non-associated gas).
The flaring and venting table was compiled using monthly data submitted to the Office of Natural Resources Revenue (ONRR). This is the best data source because reporting is mandatory and strictly enforced, and flaring and venting are accounted for separately. All volumes are in millions of cubic feet (MMCF).
The venting and flaring volumes are segmented for both OWG and GWG production. Venting produced gas (mostly methane) is a more significant environmental concern from both air quality and greenhouse gas (GHG) perspectives.
Observations and Comments:
The total volume of gas flared and vented in 2025 was 9.7 bcf (chart 1). 80% of that volume was flared, leaving 20% vented. OWG flaring (chart 5) reached a new high of 7.785 bcf in 2025, a near record oil production year for the Gulf.
Total venting and flaring in 2025 increased by 819 million cubic feet vs. 2024. However, the 7-year trend line remains favorable (chart 1).
Thinking that 2019, a record year for total flaring and venting, may have biased the trend line, I extended the chart back to 2015, the first year for which I have ONRR data. As you can see in chart 2, the overall trend is still favorable.
The % of produced gas that was flared or vented remains persistently above the historical 1.0% target (chart 3). Flared/vented volumes were below 1% of production prior to 2018.
The higher flaring/venting % may be because most gas production is now from oil wells, which typically have higher flaring rates associated with processing upsets.
The flaring and venting gap between GWG and OWG has narrowed, largely because of an increase in GWG flaring/venting. The combined rate for GWG more than doubled over the 7 year period, rising to 0.81% vs. 1.34% for OWG. (chart 3)
Total venting rose to 1.7 bcf in 2025, the highest venting volume in 3 years.
The % of GWG being vented doubled over the past 5 years to over 0.50% (chart 4). The growth in venting warrants further investigation.
The % of OWG vented increased slightly to 0.20%. Further reduction in OWG venting had been expected given that OWG production is increasingly from deepwater facilities with modern flaring systems.
A 2020 Univ. of Michigan study found “Large, older facilities situated in shallow waters tended to produce episodic, disproportionally high spikes of methane emissions. These facilities, which have more than seven platforms apiece, contribute to nearly 40% of emissions, yet consist of less than 1% of total platforms.”
Platform specific data would be helpful in further assessing flaring/venting sources and trends.
Bryan Domangue presents the coveted Order of the Alligator citation to Mike SaucierLars Herbst welcomes Mike Saucier to our prestigious retirement organization (fMMS).
After 41 years of offshore safety leadership, Mike Saucier, an outstanding engineer and manager, is retiring from the Bureau of Safety and Environmental Enforcement (BSEE).
Like many of the offshore program’s stalwarts, Mike earned a petroleum engineering degree from the Louisiana State University (LSU). In 1984, he began his Federal career in the Houma District Office of BSEE’s predecessor, the Minerals Management Service (MMS), where he was mentored by the great John Borne.
Mike has held many important engineering and supervisory positions including Drilling Engineer and District Manager in the highly regarded Houma District Office, Regional Supervisor for Field Operations, Regional Supervisor for District Field Operations, Acting Deputy Regional Director for District Operations, and Senior Technical Advisor for the Office of the Director. When the New Orleans District Manager retired during a hiring moratorium, Mike stepped up and assumed those duties as well.
Mike impressed his colleagues with his commitment to safety achievement, the essential core element of the offshore program. His diligence, and his firm, fair, and consistent enforcement of the safety and pollution prevention regulations, earned him respect throughout the offshore industry.
Mike is an avid outdoorsman who enjoys hunting and fishing, and has 4 grandsons to mentor in those skills. Note the impressive achievements cited in the Order of the Alligator certificate (below) 😉. The Order of the Alligator recognition is most fitting given Mike’s alligator hunting expertise, which greatly impressed those of us who were unfamiliar with such exploits!
In recognition of Mike’s outstanding career, the Board of Directors of the former Minerals Management Service (fMMS) has unanimously voted to induct Mike into the fMMS Hall of Fame! Mike receives (is sentenced to? 😉) lifetime membership in the fMMS and a registered copy of the offshore world’s prized masterpiece, the painting Rig at Sunset 😉. (image and short explanation below).
Congratulations to Mike! You made a difference!
“Rig at Sunset” was painted 50 years ago by a US Geological Survey (USGS) employee who chose to remain anonymous. Initially, the masterpiece was presented to USGS (later MMS) engineers and scientists who had made important contributions to the offshore oil and gas program. Understandably, the intended recipients were so humbled by the magnificence of the painting that they could not accept it. As the painting grew in value and international prominence, framed copies were presented to outstanding retirees and the original painting was kept at a secure, undisclosed location.
The Buckskin field (LLOG) is located in Keathley Canyon blocks 785, 828, 829, 830, 871, and 872 in 6,800 ft (2,073 m) of water. The KC 828 lease expired last year and LLOG’s bid for that block at the BBG2 sale was rejected.
BOEM’s Decision Information Matrix for Sale BBG2 is attached. As previously noted, 2 of the 25 high bids were rejected: Keathley Canyon Block 828 ($1,101,202) and Atwater Valley Block 63 ($650,018).
MROV=Mean of the Range-of-Value; LBCI=Lower Bound Confidence Interval
In the case of Keathley Canyon 828, BOEM’s valuation is more than 20 times the high bid. BOEM valued this block far higher than any other block in the sale.
KC 828 had been previously leased and that lease expired on 9/3/2025. The lease block was part of LLOG’s Buckskin field. Apparently, the lease expired due to inactivity given that the last well reached total depth more than a year prior to the expiration date. LLOG wanted the lease back. BOEM’s rejection sends a message that the price went up (by a lot 😉).
Finally, why didn’t any other company bid on KC 828, a block that has been publicly reported as being part of the Buckskin field?
My colleague Keith Meekins shared an informative AAPG article about the importance of Miocene reservoirs in offshore oil and gas production worldwide.
“The Miocene delivered a significant amount of sand with excellent reservoir characteristics around the world,” noted Erik Scott, exploration geologist and consulting geologist/sedimentologist.
“Generally, hydrocarbons are coming from deeper, older rock – the Cretaceous, the Jurassic. By the time these source rocks get to the (hydrocarbon) generation window, the Miocene reservoirs are in place,” Scott said.
“Generally, the Miocene deposits are surrounded by fine-grained muds that produced sealing potential,” he noted.
More:
Miocene reservoirs account for more than 40 percent of established hydrocarbon reserves in the deepwater Gulf. The Bureau of Ocean Energy Management identifies more than 9 billion barrels of undiscovered, technically recoverable Miocene resources.
Recently, Eni found a giant Miocene natural gas accumulation in the Kutei Basin offshore Indonesia with an estimated 5 trillion cubic feet of gas and 300 million barrels of condensate in place.
Azule Energy, equally owned by Eni and BP, made a recent Miocene oil discovery with an estimated 500 million barrels of crude offshore Angola.
Keith points to RTM (reverse-time migration) as an important factor in helping to unlock Miocene resources. RTM produces dramatically improved images below salt bodies and in areas of complex overburden. Per AAPG, Talos Energy used reprocessed RTM seismic to identify a bypassed Miocene fault-block closure in the Green Canyon Area of the Gulf. This structure had previously been invisible.
Minimizing flaring and venting is important from both environmental and resource conservation standpoints.Flaring and venting volumes are also good indicators of how well production systems are designed, managed, and maintained.
Updated flaring and venting volumes for the Gulf of America have been compiled using monthly data submitted to the Office of Natural Resources Revenue (ONRR). This is the best data source because reporting is mandatory and strictly enforced, and flaring and venting are accounted for separately.
Below are a few summary charts. Completed tables, similar to those posted for 2024, will be attached for sharing at a later date.
Total venting and flaring (fig. 1) in 2025 increased by 819 million cubic feet (mmcf) vs. 2024. However, the 7-year trend line is still favorable. Thinking that 2019, a record flaring year, may have biased the trend line, I extended the chart back to 2015, the first year for which I have ONRR data. As you can see in the second chart, the trend is still favorable.
80% (7785 mmcf) of the total gas flared and vented in 2025 (9741 mmcf) was flared from oil wells (chart below). That’s unsurprising given that most of the Gulf’s gas production is from deepwater oil wells, and flaring rates are higher for oil wells than for gas wells.
The best performance indicators are the normalized data (i.e. percentages of produced gas that are flared and vented both for oil wells and gas wells). Overall (chart below), flaring and venting volumes remain stubbornly above 1.0% of total gas production, the historical target last achieved in 2015. I’ll separate venting and flaring for both oil and gas wells in a future post.
Lars Herbst saw this “beauty” while sitting at a rooftop “establishment” in Pensacola. Reminded him of our temporary Pensacola office and Destin Dome drilling. Lars had visions of returning to work as Pensacola District Manager! 😉
Upon returning to his senses, Lars reports that it’s the Borr jack-up rig Odin purchased from Noble’s fleet. The rig was brought from Mexico to Pensacola for modifications, and will be under contract to Cantium to drill in the GOA, but not the Eastern GOA!
Nothing tilts public opinion more than high gasoline prices, or worse yet shortages! Hence the 1975 legislation establishing the SPR, the massive SPR drawdown in 2022, and this year’s withdrawals.
Looking back to the halcyon days of the US offshore program, it was the gas lines in the 1970s that drove the remarkable and rather unlikely growth in the program during the Carter Administration (1977-1981). A few highlights from those four years:
15 lease sales including 3 offshore Alaska, 3 in the Atlantic, and 1 offshore California
Drilling activity in all 4 regions: GoM, Pacific, Alaska, and Atlantic
North, Mid, and South Atlantic District offices for permitting and inspections
5300 well starts including 97 in water depths > 1000′
314 new platforms including Cognac, the world’s first platform in > 1000′ of water
Perhaps unthinkable today, the Governor of Massachusetts from 1979-1983, Ed King, was a strong supporter of offshore drilling. Absent that support, the exploratory drilling on Georges Bank would probably have never occurred. /s/ Nostalgic Old Man 😉
BOEM Press Release: “The Bureau of Ocean Energy Management announced today the critical role of offshore leasing, resource assessment and long-term planning in supporting record oil production on the U.S. Outer Continental Shelf, which reached more than 714 million barrels in 2025.”
Was 2025 a record OCS oil production year?No, 2025 came very close, but barring belated revisions, 2019 retains the record.
Did 2025 oil production exceed 714 million barrels? Not even close according to the US Energy Information Administration (EIA), which reported a final OCS production total of 692.6 million barrels for 2025. The Office of Natural Resources Revenue (ONRR), to whom all production data must be reported, has yet to post their final 2025 numbers, but they are normally very close to the EIA totals. Also, ONRR’s fiscal year totals do not suggest calendar year production in excess of 700 million barrels. BOEM’s announced 714 million barrel CY 2025 total is more than 60,000 bopd higher than the actual EIA CY or ONRR FY daily averages, and even exceeds the total posted in BOEM’s data center.
See the 2019 and 2025 oil production totals in the table below. The BOEM 2025 numbers appear to be erroneous.
On the plus side, per EIA’s latest update, Jan. 2026 was a record production month for the Gulf. January’s ave. production of 2.060 million bopd surpassed the Aug. 2019 ave. of 2.044 million bopd.
Barring significant tropical storm shut-ins over the next 6 months (hurricane season starts today!), a production record in 2026 seems like a good possibility.
Bud's Offshore Energy (BOE) 