Beacon Offshore Energy LLC, an oil explorer backed by Blackstone Inc., is betting on a drilling renaissance in the U.S. Gulf of America/Gulf of Mexico as it starts up some of the most productive wells in the US using new technology to pump once-impossible-to-reach crude.
The company’s four wells, which started producing between July and October, are pumping an average of 25,000 bpd, Chief Financial Officer Marc Hensel said in an interview.
“These are the largest producing wells in all of North America, not just in the Gulf,” said Hensel, who helped form Beacon in 2016 with backing from Blackstone.
Wells in the Gulf such as Beacon’s are important to watch in the years ahead because they’ll be the engines of US production growth as output plateaus in aging shale fields. That shift toward more productive offshore wells with longer lifespans threaten to pose a challenge for the global crude market as a supply glut looms.
Beacon’s wells are part of the Shenandoah prospect, which Occidental Petroleum Corp.’s Anadarko Petroleum discovered in 2009 but ultimately left behind for quicker, easier output onshore at the start of the shale boom. Beacon became the operator in 2020 with a goal of getting costs down to ultimately produce the prospect.
“I love stranded discoveries,” Hensel said. “When someone has found the oil in the ground and you just have to get it out, that’s obviously much lower risk than starting with a lease of open ocean with no discoveries on it and you’re having to drill exploration wells.”