• 3 minutes Biden Seeks $2 Trillion Clean Energy And Infrastructure Spending Boost
  • 5 minutes While U.S. Pipelines Are Under Siege, China Streamlines Its Oil and Gas Network
  • 8 minutes Gazprom fails to exempt Nord Stream-2 from EU market rules
  • 3 hours China wields coronavirus to nationalize American-owned carmaker
  • 11 hours Trumpist lies about coronavirus too bad for Facebook - BANNED!
  • 14 hours The Truth about Chinese and Indian Engineering
  • 14 hours China's impending economic meltdown
  • 3 hours Renewables Overtake Coal, But Lag Far Behind Oil And Natural Gas
  • 17 hours Why Oil could hit $100
  • 1 day The World is Facing a Solar Panel Waste Problem
  • 3 days The Core Issue Of US Chaos..Finally disclosed
  • 24 hours Pompeo upsets China; oil & gas prices to fall
  • 5 hours Open letter from Politico about US-russian relations
  • 19 hours Brent above $45. Holding breath for $50??
  • 7 hours Rational analysis of CV19 from Harvard Medical School
  • 2 days Sell Natural Gas Benefits to Grow the Market!
  • 2 days Trump Suggests Delaying Election Amid Fraud Claims
Are Oil Majors Giving Up On Guyana?

Are Oil Majors Giving Up On Guyana?

Guyana has become a hotspot…

Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

More Info

Premium Content

Junior Time in the Gulf of Mexico Shelf

A critical change is afoot in the Gulf of Mexico petroleum business.

Major operator Apache said this month it is exiting the shallow-water Gulf of Mexico shelf. The company will sell its property portfolio here to energy investment specialists Riverstone for $3.75 billion.

The interesting thing is, it's only been about 10 years since Apache was aggressively pushing to get into the GOM shelf. The area has since been a success for the company, today producing 95,000 boe/d with 239 million boe in proved reserves.

And yet Apache is getting out of the play. Telling us the company no longer sees the growth potential here it once did.

Related article: Catalysts to Watch out for when Investing in Energy Companies

This is probably true for a company of Apache's size. The firm is now focused squarely on resource plays that allow it to achieve the economies of scale a big producer needs.

The more interesting part is seeing a well-heeled investor like Riverstone moving into the shelf. It's a play the group knows well. In fact, Riverstone partners John Browne and James Hackett formerly ran BP and Anadarko (respectively) at the time when both those companies sold shelf projects to Apache.

With that kind of familiarity, Riverstone must be seeing an opportunity in the shallow GOM. One that perhaps doesn't fit for a big firm like Apache, but is attractive for a smaller operator.

Related article: Rig Fire Exposes Lingering Dangers of Offshore Drilling

Other junior producers have lately been having good success on the shelf with horizontal drilling. The incremental gains in production and reserves look very profitable.

This kind of program might not affect the bottom line much for a large producer. But for a junior it could be a company-maker.

Could this be the reason the play is getting at least one big vote as the "next thing" for small E&Ps? Keep an eye on this space.

Here's to picking up what the giants leave behind,

By. Dave Forest


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News