We used to get hurricanes all the time. Big, powerful stormsābeautiful storms, but they were a disaster. And you know why? Because they didnāt respect America, they thought we were weak. So I called NOAA and FEMA and said āweāre changing it to the Gulf of America, because these hurricanes have gotta stop pushing us around, itās not good.ā And the weather people said āsir, you canāt just change the name of an ocean, it wonāt stop the hurricanes, theyāre too strong!ā But we changed the name and we got Tim Apple to change the maps and now we donāt have hurricanes anymore.
We used to get hurricanes all the time. Big, powerful stormsābeautiful storms, but they were a disaster. And you know why? Because they didnāt respect America, they thought we were weak. So I called NOAA and FEMA and said āweāre changing it to the Gulf of America, because theseā¦ https://t.co/mg8BdOQkYrpic.twitter.com/lmik9DMWlu
TheĀ Buckskin fieldĀ (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 LLOGās bid for that block at the BBG2 sale was rejected. That bid rejection has been appealed.
We assume 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 to reacquire the lease back, but BOEM’s valuation was 20 times higher than LLOG’s bid. It’s also interesting that no other company submitted a bid. Did no one want a lease in an established field? BOEM valued this block far higher than any other block in the sale.
LLOG’s letter of appeal is not publicly available. Below is the summary blurb from the Serial Register Page:
By letter dated May 27, 2026, LLOG Exploration Offshore, L.L.C. appealed theĀ Bureau of Ocean Energy Managementās (BOEM) decision for OCS-G 38173, covering all of Block 828, Keathley Canyon. LLOG Exploration Offshore, L.L.C.Ā is requesting reconsideration of the rejection decision. The Adjudication Section received the written request and statement of reasons within the 15 days of the rejection decision, on May 28, 2026.
According to the applicable regulation, the BOEM/MMA Director is the deciding officer and the decision is not subject to appeal to the Interior Board of Land Appeals.Ā The rejection seems rather straightforward under BOEM’s bid evaluation policies, but perhaps there is much more to the story.
Two particularly troubling examples of decisions that threatened long-term US offshore production and national security, and endorsed higher oil prices:
Sale 257 court ruling:In 2022, a Federal judge ruled in favor of higher oil prices. In response to an OCS Sale 257 lawsuit, the judge agreed with the NGO plaintiffs that BOEM failed to consider the āpositiveā effect that higher prices (the logical result of lower production) would have on reducing demand. In particular, the plaintiffs asserted that BOEM failed to consider the effect that reduced production (and higher prices) would have on foreign consumption and the associated GHG emissions.
The judge not only decided in favor of the plaintiffs, but ruled that BOEMās omission was so serious that the lease sale had to be vacated. The judge’s decision was subsequently overturned by legislative action.
OCS Leasing Policy: The official leasing policy, as articulated in the 2024-2029 OCS Leasing Program (published 9/2023), was to phase out oil and gas production:
The long-term nature of OCS oil and gas development, such that production on a lease may not begin for a decade or more after lease issuance and can continue for decades, makes consideration of net-zero pathways relevant to the Secretaryās determinations on how the National OCS Program best meets the Nationās energy needs. (p. 6, 2024-2029 Leasing Program)
The Leasing Program prioritized “net-zero pathways” over cost and national security considerations. The clear objective was to prevent new production. Absent legislative action, we would have had a 5 year leasing plan with no lease sales!
White Fleet Drillingās WFD 450 jack-up drilling rig
Arena Energy CEO Mike Minarovic: āWe are āall inā on the future of the shallow water Gulf of America. The Shelf still holds vast potential, and the WFD 450 gives Arena the reach to unlock provedĀ reserves that no other rig in the Gulf couldĀ access.āĀ
The WFD 450Ā drilling rig, theĀ deepest water depthĀ rated jack-up operating in the Gulf, is conducting a multi-well drilling program for Arena following a $65 million refurbishment program.Ā
Built in 1999 and formerly operated by Valaris, the rig was cold-stacked in the Gulf for seven years prior to White Fleet’s acquisition. The upgraded rig was christened on January 9, 2026, and began drilling operations in late March.Ā
The WFD 450 can drill in water depths up to 400 feet and to total depths ofĀ 30,000 feetĀ ā capabilities that give Arena access to resources previously beyond the reach of the Gulf’s rig fleet. That reach is expected to unlock significant new production from provedĀ reserves that hadĀ remainedĀ undeveloped due to equipment constraints.Ā
The Borehole File indicates that Arena has drilled 4 development wells in Eugene Island Area Blocks 315 (231′ water depth) and 325 (252′ water depth) since the rig’s March restart. Two of those wells were completed for production.
Arena has also completed 3 wells in shallower water (138′) in the Main Pass area in 2026.
Cantium, the other active shelf operator, has completed 5 wells this year in very shallow water (50-58′). No other company has conducted drilling operations on the shelf this year.
Arena produced 8,266,036 bbls of oil and 21,079,794 Mcf of gas in 2025, making the company the number one shelf producer of both commodities.
Cantium produced 5,444,651 bbls of oil and 6,716,670 Mcf of gas in 2025.
Ken Arnold, NAE, contributed greatly to the responsible development of offshore oil and gas resources. Among Ken’s achievements – lead engineer for a major offshore operator, entrepreneur who founded a successful engineering and management company, author of production textbooks, distinguished SPE lecturer and university instructor, NASEM Marine Board member, and safety leader who participated in the development of OCS regulations and standards.
Ken explains how his new engineering company was involved in the Gulf’s first “Rigs to Reactors” initiative:
My first job as Paragon Engineering Services was to advise Westinghouse on the ability of their yard in Jacksonville, FL to fabricate offshore jackups.
They had built a total facility with acres under roof, a huge drydock, and the biggest gantry crane in the US to fabricate large nuclear reactor vessels which stood on top of a barge hull which contained all the equipment necessary for a power plant. They had an order for, I think, 12 of these units. The plant was designed to complete one a year through an assembly line type of process. The facility was approved by Nuclear Regulatory Agency, and others. The piping model of the barge hull (this was in 1980 before we had 3-D models and large complex facilities were often constructed in scaled plastic) had a footprint as big as my house.
The goal was to make identical units which would be floated to a shore-based site where it would be sunk and protected from waves, etc.
Then came Three Mile Island and all orders were canceled.
Ken recalls further:
They eventually decided not to get into the rig fabrication business. The only thing I know of which was ever fabricated in the huge fab building was some cars for a ride at Disney World. I drove by the site many years later and the gantry crane was gone and it had been turned into a container port. I am not sure what happened to the huge drydock.
Raising the bar! The EIA’s August data release (delayed until 9/2) upped the Gulf’s all-time monthly production record (April 2026) by 14,000 bopd to 2,123,000 bopd. June production settled in just below the 2 million bopd mark.
Gulfwide, Chevron was high bidder for 9 of the 10 blocks they sought vs. 6 of 9 for Oxy, 5 of 8 for Shell, 5 of 6 for BP, and 5 of 5 for Equinor.
US supermajors and historically important Gulf producers, Exxon Mobil and ConocoPhillips, were no-shows once again.
Bidding was spirited among the “big dogs” for KC Block 258, with BP taking the prize (assuming their $7.5 million bid is accepted). Chevron rebounded by taking KC 430, outbidding Oxy and Shell. (See below)
Among the large independents, LLOG batted 8 for 8, Murphy 6 for 8 (including the sale’s highest bid of $7.7 million), Talos 2 for 2, and Woodside 1 for 2. Our favorite tribal corporation, Red Willow Offshore (Southern Ute Tribe), partnered with LLOG, Navitas, Houston Energy, and CL&F Offshore on the high bid for Atwater Valley Block 63.
Murphy was the top $$$ bidder among all participating companies (see below). In 2025, Murphy was the Gulf’s 5th leading oil producer, trailing only Shell, BP, Chevron, and Oxy.
The sale’s highest bid ($7.7 million) was for Alaminos Canyon Block 380. The block was previously leased to LLOG, and exploratory drilling was conducted in 2019. LLOG’s lease expired on 12/20/2025, and complete well data were released on 4/24/2026. Murphy must have liked what they saw.
The absence of other bidders for AC 380 reminds us that interpretations and strategies differ. Murphy has had a pretty good track record in the Gulf. We’ll see what happens.
Murphy and Shell valued and competed for 2 other Alaminos Canyon blocks as the summary below indicates, and Murphy was the lone bidder ($4.1 million) for another.
“L” for the “W”? All 5 of Equinor’s high bids (red) formed an “L” in the Walker Ridge area. Equinor was the lone bidder for each (see below). Existing blocks WR 56 and 100 (blue) are Equinor leases. Prior lessee Anadarko drilled on block 143 in 2014
We’ll see how this all worked out in about 10-20 years! š
Led by Arena’s 9 high bids, shelf operators made a strong showing at Sale BBG3. As illustrated below, the acquiring companies see good opportunities in or near old fields. The BBG3 leases are colored red.
Arena bid on MI 519, 528, and 529. MI 519 produced 152 bcf of gas and 336,536 bbls of condensate between 1988 and 2012..Arena bid on EI 277, 280, and 281, blocks that produced 8.3 million bbls and 39.2 bcf between 1990 and 2016.Since 1973, 24 million bbls and 53 bcf have been produced in EI 339 where Arena drilled 62 wells. They no doubt had good reasons for bidding on adjacent block EI 340.3.2 million bbls and 18.7 bcf were produced in PL 25 between 1997 and 2016. 27 million bbls and 56.3 bcf were produced between 1955 and 2024 in ST 54. Arena bid on both blocks at Sale BBG3.Renaissance bid on ST 314, which had minor production between 2015 and 2019. Renaissance acquired block 317 at Sale BBG2.Renaissance bid on WD 133, where 12 million bbls of oil and 31 BCF were produced between 1966 and 2023. Five companies, including Arena, had drilled 63 wells on the block.
Listed in the table below are the shelf blocks receiving bids. According to Marine Minerals Administration (MMA) online data, wells have been drilled on all 12 blocks and production structures were installed on 7.
According to the online structures file, 5 platforms remain on 2 of the blocks. Production and quarters platforms installed by Exxon in 1982 and 1987 remain on ST 54 along with a caisson structure installed by Walter in 2007. Production platforms installed by GOM Shelf (1966) and Arena (2005) remain on WD 133.
Per the borehole file, 3 of the WD 133 wells have not been plugged. These wells were drilled by Arena and are on the F platform, which is one of the two WD 133 platforms that have not been decommissioned.
Also noteworthy, one well that bottoms on ST 314 has not been plugged. That well was drilled by Renaissance from ST 317, which was reacquired by Renaissance at Sale BBG2. The well ceased production in 2019, but the platform from which it was drilled remains in place on the reacquired lease.
Reuse options and decommissioning obligations for the remaining wells and platforms on leases reissued following BBG3 are no doubt topics for discussion between MMA and the operators.
Notes: The Gulf keeps on rollin’ – this was the 137th Gulf lease sale. Congrats to Bryan Domangue on being named Gulf of America Regional Director for the Marine Minerals Administration!The WWII Museum in New Orleans was a nice venue for the sale.
