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! 😀
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.
The table below compares the pre-sale stats for BBG3 with those for BBG1 and 2. The number of BBG3 bids, while well below BBG1, which was the first sale in 2 years, bounced nicely from BBG2 levels.
“After careful consideration, it was determined there is no path forward to permit these projects in the U.S. for the foreseeable future.”
Comment: The poor prospects for these leases had more to do with bad investment decisions than permitting challenges. The company is fortunate to be able to rollover their lease bonuses into LNG infrastructure and gas turbine purchases.
The relinquished leases:
OCS-A 0539: RWE paid the highest bonus ever, $1.1 billion, for this lease at theirrational exuberance Atlantic wind sale in Feb. 2022. The amount was $305 million higher than the next highest bonus for any offshore lease.
OCS-G 37334: RWE was the only bidder at the 2023 Gulf wind lease sale. A second Gulf wind sale received no bids.
The wind adverse U.S. Administration offered RWE a lifeline that allows them to reinvest in more prospective projects:
LNG infrastructure: a financial investment of $900 million to acquire an indirect 16% stake in the Louisiana LNG Project. RWE proceeds will be used to fund the construction of the terminal.
Natural gas turbine reservations: To support the expansion of its growing flexible power generation work in the U.S., RWE Americas has signed a $300 million turbine reservation agreement securing future generating capacity to meet growing U.S. electricity demand. The company is developing a pipeline of 15 natural gas peaking projects across target markets in the U.S.
Apparently, the attached letter from 50 U.S. environmental groups asking RWE not to keep their wind leases was not persuasive (and perhaps RWE didn’t appreciate the implied threat of litigation against a deal that was in the company’s best interest).
Per EIA, Gulf of America oil production declined in May by over 200,000 bopd from April’s record production, which was corrected upward by 2000 bopd. Was the April number anomalous? We’ll need additional monthly data and the audited ONRR numbers to get a better read.
EIA posted corrected April and May totals of 30,000 bopd for the Pacific (California OCS), a 150% increase from February owing to the Sable Santa Ynez Unit restart. Although Pacific OCS production has been in the doldrums for years, the region has an impressive record of 202,000 bopd from Dec 1995.
Atlantis is located about 150 miles south of New Orleans and has been in production for nearly 20 years. The expansion project adds two new subsea water injection wells to help increase the pressure of targeted reservoirs, unlocking additional barrels and extending the producing life of one of bp’s flagship US offshore assets.
The project, which was delivered ahead of schedule and under budget, adds approximately 10,000 barrels of oil equivalent per day (boe/d) of gross peak annualized average production, with around 5,000 boe/d net to bp.
Some of you may remember the 2009 False Claims Act allegations by a former BP contractor claiming that BP did not properly maintain the engineer-approved “as built” drawings of systems and structures aboard the Atlantis facility. The contractor alleged that the absence of the documentation created increased safety risks for the facility and to its personnel.
Following the allegations, an industry source closely involved with the project (but not a BP employee) made the following comment to the BOE blog:
Atlantis was by far, in my opinion, the best of the bunch; proceeded as a normal construction project. The PMs were the best I’ve come across.
BOEMRE (the name of the offshore safety regulator at the time) conducted a comprehensive investigation of the matter. Director Michael Bromwich sumarized the findings:
“As the report makes clear, although we found significant problems with the way BP labeled and maintained its engineering drawings and related documents, we found the most serious allegations to be without merit, including the suggestion that a lack of adequate documentation created a serious safety risk on the Atlantic facility. We found no credible evidence to support that claim.”
As noted in previous posts, the Cox legacy of non-compliance has continued under new ownership. In 2026 YTD, Array Petroleum accounted for 52% of Gulf of America Incidents of Non-Compliance (INCs) while operating only 12% of the platforms, and producing only 0.06% of the oil and 0.17% of the gas (2025 production data). Their 2026 YTD INCs/inspection ratio is 7.55 times the Gulf average and 14.6 times the Gulf average if Array inspections are excluded.
The only platform operated directly by NRW was cited for 3 INCs on 2 inspections.
Per MMA data, W&T operates 117 platforms in the Gulf. The number of platforms that were included in the acquisition of the 6 Cox fields is unknown. W&T’s INC/inspection ratio in 2023, the year before the Cox acquisition, was 0.72 (80/111), which was better than their 2026 performance (0.94), but worse than the Gulf-wide 2023 average of 0.57. So W&T’s compliance relative to other Gulf operators was about the same before and after the acquisition.
According to the borehole file, neither Array, NRW, nor W&T conducted any drilling operations in 2026 YTD.
Kudos to the MMA inspectors for their diligence in identifying INCs and issuing citations. The 2026 YTD data table is below.
W
CSI
FSI
total INCs
facility insp
INCs/isp
Array
403
115
4
522
88
5.93
NRW
1
2
0
3
2
1.50
W&T
38
46
4
88
94
0.94
GoA total
653
296
56
1005
1280
0.785
Notes: Numbers are from published BSEE data (7/21/2026 inquiry); INC=incident of non-compliance; W=warning INC; CSI=component shut-in INC; FSI=facility shut-in INC; INCs/insp= INCs issued per facility inspection; each facility-inspection may include multiple types of inspections (e.g. production, pipeline, pollution, Coast Guard, site security, etc)
Bud's Offshore Energy (BOE) 