Current Releases
Shenandoah platform sets sail and Beacon sanctions additional developments
Houston, TX, December 20, 2024. Beacon Offshore Energy LLC (“Beacon”) announced today the following significant milestones and updates for certain of its operated developments:
Shenandoah
· On December 13, 2024 the Shenandoah floating production system (“Shenandoah FPS”) sailed away from HD Hyundai Heavy Industries’ shipyard in Ulsan, South Korea and is currently in transit to the US Gulf of Mexico. The Shenandoah FPS is scheduled to arrive at Kiewit Offshore Services’ fabrication yard in Ingleside, TX in the middle of February for limited final preparations and regulatory inspections to be followed by wet tow and offshore installation at the Shenandoah Walker Ridge project site. The 25,000 metric ton Shenandoah FPS will be placed into service with a nameplate capacity of 120,000 bopd. Mooring pile installation has been completed with infield pipelay activities to be performed in the first quarter of 2025. The 102-mile, 18-inch SYNC oil export pipeline installation and associated upgrades to the CHOPS GB 72 platform have been successfully completed. Rig operations are underway for the completion of the second of four Phase 1 producing wells, with rig flowback operations to be conducted in the first quarter of 2025, followed by completion operations on the final two Phase 1 producing wells. First oil for Shenandoah remains on track for the second quarter of 2025.
· Beacon and its partners have sanctioned the next phase of development at Shenandoah (“Shenandoah Phase 2”). Operations envisioned as part of Shenandoah Phase 2 include the drilling and completion of two additional producing wells, expansion of the Shenandoah FPS throughput capacity to 140,000 bopd via debottlenecking activities by early 2026, and installation of a subsea booster pump to provide hydraulic support by reducing back pressure on the wells in the dual infield flowline and riser system. Beacon estimates that the activities from Shenandoah Phase 2 to be conducted between 2025 and 2028 will add approximately 110 MMBOE of P50 resources. In conjunction with these incremental activities and reflective of the maturation of the Shenandoah project, the Shenandoah working interest partners have secured an additional $150 million of aggregate debt commitments from various financial institutions via the exercise of an accordion feature in their respective Shenandoah project finance term loans bringing the aggregate debt commitments to the Shenandoah project to over $1.2 billion. Beacon is joined by HEQ Deepwater and Navitas Petroleum in the Shenandoah Phase 2 development.
· Additionally, Beacon and its partners are advancing plans (including ordering of certain long lead equipment) to facilitate the development of the Shenandoah South discovery located in Walker Ridge 95 in water depths ranging from 5,800 to 6,000 feet (“Shenandoah South”). The field’s proximity to the Shenandoah FPS will enable a cost-efficient subsea tieback development to be accomplished via a three-mile flowline and dedicated riser connection to the Shenandoah FPS. Shenandoah South is expected to include the drilling & completion of two wells with initial production from the first well expected to occur in the second quarter of 2028. Beacon estimates a total of 74 MMBOE of P50 resources for Shenandoah South. Beacon is partnering with Houston Energy, HEQ Deepwater, and Navitas Petroleum in the Shenandoah South development which is planned for final investment decision by the second quarter of 2025.
Zephyrus
· Beacon and its partners have sanctioned the first phase of the Miocene aged development located in Mississippi Canyon Block 759, approximately 130 miles southeast of New Orleans, LA, in water depths ranging from 3,100 to 3,600 feet. The initial well at Zephyrus was drilled by Beacon in 2023, discovering high quality oil in the Middle Miocene Cris “I” aged M2 sand. The initial development plan includes completion of the discovery well and the drilling and completion of one additional well targeting the discovered reservoirs, as well as additional Middle Miocene sands. Both wells are projected to come on-line in the fourth quarter of 2025. Beacon and its partners have signed a production handling agreement to connect the Zephyrus field to the existing West Boreas subsea infrastructure operated by Shell Offshore Inc. (“Shell”) for further processing on the Shell operated Olympus production platform in the Mars Corridor. The efficient infrastructure-led development is expected to result in reduced emissions, lower development costs, and shortened time to first oil, made possible by incorporating a High Integrity Pressure Production System (“HIPPS”) into the nine-mile Zephyrus subsea infrastructure. Beacon estimates a total of 75 MMBOE of P50 resources for the Zephyrus field. Beacon is joined by Houston Energy, HEQ II, Red Willow Offshore, Westlawn GOM, and Murphy Exploration & Production in the Zephyrus development.
Scott Gutterman, Beacon’s Chairman and Chief Executive Officer, stated: “The successful sail-away represents another major milestone for the Shenandoah project and is the direct result of the relentless, detailed oriented, engineering driven, and collaborative approach of our talented project team, partners, vendors, and suppliers. We would like to extend our congratulations and gratitude to HD Hyundai Heavy Industries for having done an extraordinary job in overcoming construction challenges and delivering the Shenandoah production platform in 2024.
The sanctioning of the second phase of development at Shenandoah reflects the large resource potential we have confirmed during our initial drilling operations and through improved seismic imaging via implementation of a Full Waveform Inversion derived velocity model. The nearby Shenandoah South project would mark the second lower Wilcox subsea tieback that we plan to produce via our expanded Shenandoah production hub. Shenandoah South and our Monument development, which is expected to achieve first oil in the fourth quarter of 2026, represent the implementation of our strategy to commercialize the sizable, discovered resource opportunities within tieback range of the Shenandoah FPS. When taken together, our Shenandoah, Shenandoah South, and Monument fields are estimated to deliver nearly 600 MMBOE of P50 resources.
The Zephyrus field is located in an area that is home to some of the most prolific producing wells in the US Gulf of Mexico with excellent reservoir and fluid properties, and Zephyrus is no exception. After initially discovering the field in 2023, through creative engagement with Shell’s commercial and engineering teams, we were able to design a highly efficient, short cycle and low emissions production solution to safely develop the Zephyrus resource accumulation.”
About Beacon Offshore Energy
Beacon Offshore Energy is a Houston, Texas-based exploration and production company formed in 2016 with a focus on acquiring, exploring, and developing upstream oil and gas properties in the deepwater Gulf of Mexico. Beacon is actively focused on developing its resource position and currently holds interest in 87 deepwater leases covering nearly 500,000 gross acres. Visit www.beaconoffshore.com for more information.
Contact
Beacon Offshore Energy
Marc Hensel
(346) 388-0172
publicrelations@beaconoffshore.com
Beacon Provides Operational Updates
Houston, TX, July 31, 2024. Beacon Offshore Energy LLC (“Beacon”) announced today the following operational updates:
Winterfell
· The Miocene aged sub-sea tieback development was successfully brought online in early July. Initial production rates from the first two Winterfell wells are consistent with expectations. A third well is currently being drilled to its horizontal target after successful coring and logging operations and is expected to be online prior to the end of third quarter of 2024. The three wells are projected to deliver gross production of approximately 20,000 boepd.
Shenandoah
· The first phase of rig operations at the Shenandoah field has been safely concluded via the drilling of the four producing wells in Phase 1 of the development. Drilling results have confirmed Beacon’s expectations of vertical and horizontal connectivity of the Wilcox reservoirs with excellent rock and fluid properties. Completions operations for the wells have commenced and are expected to be concluded by Q1 2025.
· The construction activities for the 120,000 bopd floating production system (“Shenandoah FPS”) have resulted in a successful lift of the topsides onto the Hull. Through the diligent cooperation of our engineering, construction, and commercial teams, repair activities for the topsides structure have been successfully completed including rigorous engineering analysis, 3D laser surveying, destructive/hardness testing and primary and secondary steel repair and replacement. Topside component inspections have been successfully conducted and the entirety of the topsides and the hull are expected to be fully completed and commissioned to enable the sail away of the Shenandoah FPS from the HD- Hyundai Heavy Industries Co Ltd. shipyard in Ulsan, South Korea by late December 2024. First production from Shenandoah is expected to occur in Q2 2025.
Monument
· Beacon and its partners sanctioned the first phase of the Wilcox aged development earlier this year. The project will initially be developed via a two well, 17 mile subsea tieback to the Shenandoah FPS facility. Beacon will bring its Shenandoah Wilcox execution experience to bear for the Monument development enabling Monument first production by Q3 2026. Dedicated production equipment for Monument has been procured and will be installed on the Shenandoah FPS prior to sail away, long lead drilling and subsea equipment have been procured, and key execution contracts have been awarded.
· On July 31, 2024, Beacon entered into a transaction to divest a 12.86% working interest in the Monument project to an undisclosed third party for a combination of upfront cash consideration and future development cost carry payments. The transaction carries an effective date of March 1, 2024 with Beacon retaining a 30% working interest subsequent to the divestment.
Scott Gutterman, Beacon’s Chairman and Chief Executive Officer, stated: “We are pleased to report on several important milestones as we safely execute our deep inventory of operated developments focused on delivering high margin/low emission oil projects in the deepwater Gulf of Mexico. After making the discovery in 2021, our team and partners have worked intensely to develop the Winterfell field. Achieving initial production at Winterfell and delineating the next fault block in the field are important first steps to providing a better understanding of the field’s ultimate potential. At Shenandoah, we successfully executed the drilling campaign delivering outstanding subsurface results and together with our partner HHI, our team has done an extraordinary job on the Shenandoah FPS repair and construction scope. We look forward to continuing to execute on our high impact Shenandoah development with first oil expected in Q2 2025. The Monument development represents the next step in our strategy to commercialize the sizable resource opportunities within tieback range of the Shenandoah FPS in the northwestern area of Walker Ridge.”
About Beacon Offshore Energy
Beacon Offshore Energy is a Houston, Texas-based exploration and production company formed in 2016 with a focus on acquiring, exploring, and developing upstream oil and gas properties in the deepwater Gulf of Mexico. Beacon is actively focused on developing its resource position and currently holds interests in 87 deepwater leases covering nearly 500,000 gross acres. Visit www.beaconoffshore.com for more information.
Contact
Beacon Offshore Energy
Marc Hensel
(346) 388-0172
publicrelations@beaconoffshore.com
Beacon Completes Divestment of Non-operated Properties
Houston, TX, March 29, 2024. Beacon Offshore Energy LLC (“Beacon”) announced today the completion of the divestment of its non-operated interests in certain fields in the deepwater Gulf of Mexico in accordance with a previously executed definitive agreement with GOM 1 Holdings Inc., an affiliate of O.G. Oil & Gas Limited. The divestment includes Beacon’s 18.7% interest in the Buckskin producing field, 17% interest in the Leon development, 16.15% interest in the Castile development, 0.5% interest in the Salamanca FPS/lateral infrastructure, and 32.83% interest in the Sicily discovery.
Commenting on the announcement, Scott Gutterman, Beacon Chairman and Chief Executive Officer, stated: “The transaction demonstrates the value Beacon has created for its shareholders through the efficient development of high margin fields in the deepwater Gulf of Mexico and the timely monetization of these assets. We are proud to have been able to participate alongside of our partners in the development of the divested properties since our initial acquisition of the Buckskin asset in 2017. With the completion of the divestment, we will be able to allocate 100% of our focus and resources to our deep inventory of operated properties. Driven by our existing sanctioned operated developments, including Shenandoah and Winterfell, we expect to deliver material production and cash flow growth commencing in the second quarter 2024 and continuing through 2025.”
Jefferies International Limited served as financial advisor to Beacon and Kirkland & Ellis LLP served as legal advisor to Beacon.
About Beacon Offshore Energy
Beacon Offshore Energy is a Houston, Texas-based exploration and production company formed in 2016 with a focus on exploring, developing and acquiring upstream oil and gas properties in the deepwater Gulf of Mexico. Beacon is actively focused on developing its resource position and currently holds interests in 87 deepwater leases covering nearly 500,000 gross acres. Visit www.beaconoffshore.com for more information.
Contact
Beacon Offshore Energy
Marc Hensel
(346) 388-0172
publicrelations@beaconoffshore.com
Beacon Invests in Winterfell Development in the Gulf of Mexico
Houston, TX, January 10, 2024. Beacon Offshore Energy LLC (“Beacon”), announced today that several of its subsidiaries have taken final investment decision to develop the Winterfell discovery which is operated by BOE Exploration & Production LLC (“BOE”) and will be developed as a cost effective/low emissions subsea tieback.
As the Winterfell operator, Beacon holds a 35.41% working interest in the Miocene aged project principally located in Green Canyon blocks 943, 944, 987, and 988 with a water depth of approximately 5,200 feet. Winterfell was initially discovered in 2021 with subsequent successful appraisal drilling conducted in 2022. The field will be developed via a newly installed 13 mile subsea tieback to the Heidelberg spar located in Green Canyon Block 860 operated by Anadarko Petroleum Corporation. First oil is expected to occur early in the second quarter 2024 and from three initial wells projected to deliver gross production of approximately 22,000 boepd. Working interest parties include Beacon Offshore Energy Exploration LLC (35.08%), BOE (0.33%), a subsidiary of Kosmos Energy (25.04%), Westlawn GOM Asset 3 Holdco LLC (15.0%), Red Willow Offshore, LLC (12.5%), Alta Mar Energy (Winterfell), LLC (7.55%), CSL Exploration, LP (4.5%).
Commenting on the announcement, Scott Gutterman, CEO, said: “The investment decision represents an important milestone for the Winterfell project and reflects our commitment to safely and efficiently develop material operated resources located in the deepwater Gulf of Mexico. Our technical and commercial teams continue to develop solutions that provide win-win outcomes for our partners. At Winterfell we are unlocking the sub-salt field’s potential via the execution of horizontal drilling technology applied to open hole completions while securing access to the nearby Heidelberg spar and associated downstream infrastructure with available ullage. The Winterfell development once again demonstrates the ability to produce oil and natural gas in the US Gulf of Mexico with a lower carbon footprint than almost all other regions.”
About Beacon Offshore Energy
Beacon Offshore Energy is a Houston, Texas-based exploration and production company formed in 2016 with a focus on exploring, developing and acquiring upstream oil and gas properties in the deepwater Gulf of Mexico. Beacon is actively focused on developing its resource position including its operated Shenandoah project which remains on track for first oil by end of year 2024. The company currently holds interests in 89 deepwater leases with net resource potential in excess of 400 mmboe. Visit www.beaconoffshore.com for more information.
Contact
Beacon Offshore Energy
Marc Hensel
(346) 388-0172
publicrelations@beaconoffshore.com