If Beacon and HEQ are willing sellers of their majority share in the impressive Shenandoah field, as appears to be the case (per Reuters), the big dogs are interested in buying. And why wouldn’t they be? Production began last July and the targeted rate of 100,000 bopd has already been achieved from just four phase-one wells.
Reuters reports that Total, Shell, BP, Repsol, and Chevron are interested in Beacon and HEQ’s 51% stake. More about Shenandoah:
- located in Walker Ridge blocks 51, 52, and 53
- ~150 miles off the coast of Louisiana
- floating production unit (FPU) in 5800′ of water in WR block 52
- true vertical reservoir depths ~30,000′
- high pressure ~20,000 psi
- Paleogene, Inboard Wilcox trend
- FPU can host production from nearby subsea systems
- capacity is being expanded to 140,000 bopd
- estimated 600 million BOE recoverable including nearby tiebacks
- other owner: Navitas Petroleum (49% share)
Investment companies like Beacon (owned by Blackstone) are positive, and increasingly necessary, contributors to the offshore program. These companies bring capital and new exploration strategies that increase development and production. They must, of course, be committed to safety excellence, which seems to be the case for Beacon.
It’s noteworthy that Anadarko and Conoco Phillips, Shenandoah’s major original partners holding 33% and 30% interest respectively, withdrew from the project in 2018 citing unsatisfactory appraisal results and weak commodity prices. Evaluation mistakes like this are common, which is why broad and diverse industry participation is needed. With mergers reducing the number of US majors (remember Amoco, Arco, Sun, Texaco, Getty, Mobil, Phillips, Marathon, Unocal, Superior, Hess, etc.), investment companies play an increasingly important role in OCS development.
Bud's Offshore Energy (BOE) 