• 3 minutes Boris Johnson taken decision about 5G Huawei ban by delay (fait accompli method)
  • 6 minutes This Battery Uses Up CO2 to Create Energy
  • 10 minutes Phase One trade deal, for China it is all about technology war
  • 12 minutes Trump has changed into a World Leader
  • 3 hours Shale Oil Fiasco
  • 2 hours We're freezing! Isn't it great? The carbon tax must be working!
  • 4 hours Environmentalists demand oil and gas companies *IN THE USA AND CANADA* reduce emissions to address climate change
  • 20 hours Angela Merkel take notice. Russia cut off Belarus oil supply because they would not do as Russia demanded
  • 2 hours Might be Time for NG Producers to Find New Career
  • 1 day China's Economy and Subsequent Energy Demand To Decelerate Sharply Through 2024
  • 22 hours Swedes Think Climate Policy Worst Waste of Taxpayers' Money in 2019
  • 1 day Wind Turbine Blades Not Recyclable
  • 1 day Prototype Haliade X 12MW turbine starts operating in Rotterdam
  • 3 hours US Shale: Technology
  • 5 hours Indonesia Stands Up to China. Will Japan Help?
  • 1 day Denmark gets 47% of its electricity from wind in 2019
Alt Text

A Worrying Sign For U.S. Shale

After years of adding drilled…

Alt Text

Oil Falls Despite Major Outage In Libya

Oil prices fell on Tuesday…

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
Download on the App Store Get it on Google Play