Total US gas withdrawals have doubled from 30 years ago when the Gulf accounted for >20% of the US total. Gulf production declined by 87% in that timeframe.
White Fleet Drilling’s WFD 450 jack-up drilling rig
Arena Energy CEO Mike Minarovic: “We are ‘all in’ 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 proved reserves that no other rig in the Gulf could access.”
The WFD 450 drilling rig, the deepest water depth rated jack-up operating in the Gulf, is conducting a multi-well drilling program for Arena following a $65 million refurbishment program.
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.
The WFD 450 can drill in water depths up to 400 feet and to total depths of 30,000 feet — 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 proved reserves that had remained undeveloped due to equipment constraints.
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.
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.
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.
“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).
World Bank global flaring estimates are now derived from 3 satellites carrying NOAA VIIRS detectors. The increased number of observations improves the precision and accuracy of the flare locations and volume estimates.
The World Bank (WB) Global Gas Flaring Tracker is the only worldwide flaring data source. Offshore and onshore data are segmented, so offshore flaring can be considered separately for each country.
The WB estimates that 21600.03 million cu m (762.5 bcf) of gas were flared at offshore locations worldwide in 2025. This is an increase from 2024 when the total offshore flaring volume was 21159.91 million cu m.
The flaring totals for prominent offshore producers are entered in the table below. Also included are the largest offshore flares for each country.
Unsurprisingly, Norway led the pack in minimizing offshore flaring. Their total of 36.11 million cu m (1.3 bcf) is very impressive for such a large producer. The US offshore total of 160.95 cu m (5.7 bcf) is also quite respectable relative to production.
At the other end of the scale are Iran – 3329 million cu m (118 bcf), Nigeria – 2566 (91 bcf), Angola – 2300 (81 bcf), and Mexico 2068 (73 bcf). These 4 countries accounted for nearly half of all 2025 offshore flaring. They were also massive offshore flarers in 2024: Iran – 3753 million cu m, Nigeria – 2867, Angola – 2040, and Mexico – 2223.
If both onshore and offshore flaring are considered, Iran flared 29931 million cu m in 2025. That equates to 1.057 trillion cu ft!
2025 WB flaring total million cu meters
largest flare
largest flare volume
Angola
2300.26
Lombo East
862.02
Australia
268.36
Santos
61.89
Brazil
969.16
Albacora Leste
118.93
Canada
145.12
Terra Nova
95.83
China
535.56
Weizhou 12-1
68.26
Congo, Rep.
788.98
Kitina
384.12
Gabon
368.91
Tchatamba Marin
37.46
Ghana
351.81
Sankofa East
184.97
Guyana
227.38
Yellowtail
164.06
Indonesia
292.16
Belida
30.84
Iran
3329.19
Foroozan
1360.09
Libya
313.78
Bouri
74.07
Malaysia
1459.32
Kasawari
205.8
Mexico
2067.62
Akal
386.44
Nigeria
2565.88
Oso
308.37
Norway
36.11
Balder
6.38
Qatar
688.19
Ras Laffan LNG
54.65
Russia
227.27
Yuri Korchagin
82.07
Trinidad
87.66
Atlantic LNG
53.23
UK
234.08
Penguins
22.94
US
160.95
NA*
22.77
*The WB lists the field name for the largest US flare as NA. The lat/long for the Whale deepwater platform in the Western Gulf matches the identified flare location (26.22 lat., -94.67 long.)
The WB tracker identifies the Gulf of America facilities with the highest flaring volumes. The 2025 list is pasted below. Repeat top ten Gulf flarers from 2024 were Vito (14.55 million cu m in 2024), Pompano (11.68), and Lucius (5.72).
The WB lists the field name for the largest US flare as NA. The lat/long for the Whale deepwater platform in the Western Gulf matches the identified flare location (26.22 lat., -94.67 long.)
Per the WB tracker, the Terra Nova FPSO, offshore Newfoundland, was the top North American offshore flarer by a considerable margin (data for Canada below). Terra Nova was also the top flarer in 2024 (95.56 million cu m).
The location of the only flare identified offshore California corresponds with that of the Dos Cuadras field in the Santa Barbara Channel. The estimated 2025 flaring volume was 0.10 million cu m.
The WB flaring tracker is an excellent data source, but doesn’t capture vented gas and likely understates the total volume flared. The WB estimated that 160.95 million cu m (5.68 bcf) were flared at US offshore facilities in 2025. This compares with the 9.7 bcf (flaring and venting) and 8.0 bcf (flaring only) totals derived from ONRR data (chart below). The flaring difference is not surprising given that the WB numbers are dependent on satellite imagery and the ONRR data are from mandated/audited production reports. A previous comparison also showed that the WB flaring estimates are significantly lower than the ONRR numbers. From a regulatory oversight perspective, this is rather reassuring given that the reverse (WB>ONRR) would imply serious reporting issues.
Keathley Canyon 828 is not among the blocks listed for sale at BBG3. Per the Notice of Sale (p. 4), “any lease blocks whose high bids were rejected and not appealed in the immediately preceding Big Beautiful Gulf lease sale, are expected to be included as eligible for lease.” Can we therefore assume that either the KC 828 bid rejection or the prior lease expiration is being appealed?
The legislatively mandated BBG lease terms are attractive – 10 years and 12.5% royalty for deepwater blocks. A more recent legislative directive requires (wrongly in my opinion) the approval of downhole commingling requests. This accelerates the return on investments in deepwater, high pressure reservoirs. Such commingling has presumably contributed to record Gulf oil production in 2025. The longer term concern is the impact on ultimate oil and gas recovery.
Meanwhile, the Gulf rig count and well start numbers continue to disappoint. Baker Hughes (7/2/2026) lists only 4 active rigs in the deepwater Gulf – one each in the Alaminos and Mississippi Canyon areas and two in the Green Canyon Area. BSEE’s borehole file lists only 15 new deepwater exploratory well starts YTD.
Six months after the year ended, the Office of Natural Resources Revenue (ONRR) has completed their precise, to the barrel, production accounting. BOEM was correct – 2025 was a record OCS oil production year by a considerable amount. Total OCS production, nearly 714 million bbls, exceeded the 2019 record by 14 million bbls. EIA data still favor 2019 by a slight margin.
The 16+ million barrel difference between the 2025 ONRR and EIA OCS production totals is much larger than any such differential in recent years and warrants an explanation. Below are the 2025 OCS totals (first table) and the 2019 to 2025 Gulf totals (2nd table). As indicated in the second table, all other differentials between ONRR and EIA were <2 million bbls, and only the 2024 differential was >1 million bbls.
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.
Bud's Offshore Energy (BOE) 