A U.S. Department of Energy financing deal will fund offshore upgrades near Louisiana, where Arena Energy expects restored platforms and pipeline links to increase oil and gas output over the project’s life.
Arena announced Nov. 10 that its wholly owned subsidiary, Elkhorn Offshore, had finalized a $480 million loan for Project Elkhorn in the Southern Eugene Island area. The work is planned for existing offshore sites and is intended to connect future wells with natural gas pipelines already in place.
The company’s plan includes bringing inactive platforms back into service, adding production and water-handling capacity at operating facilities, and linking future wells to existing gas lines. Arena has not provided a schedule for the work or said when production gains might be reached.
Energy Secretary Chris Wright said the project could raise oil production by as much as 38,600 barrels per day. Arena separately estimates that its lifetime additions will total about 125 million barrels of oil and 250 billion cubic feet of natural gas. The company also projects $1.6 billion in additional federal royalties.
Arena estimates the work will support 2,800 jobs: 2,400 during construction and 400 in operations. These employment and production figures are projections from the company and the energy secretary.
Fox Business reported, citing a Department of Energy release, that the project would modernize 22 platforms and add as much as 77 million cubic feet of natural gas per day at peak output. Fox also reported that Arena currently produces about 30,000 barrels of oil daily in the Gulf. Those figures were reported by Fox Business.
The Energy Department describes its Energy Dominance Financing Program as offering Section 1706 loan guarantees for projects that return idle energy infrastructure to use or expand capacity at operating facilities. Arena has not announced a project completion date.
