Perdido, USA, 2010 80/10 Save for later Print Download Share LinkedIn Twitter Shell has farmed out 20% of at least eight blocks in the Walker Ridge area of the US Gulf of Mexico to Repsol, laying further groundwork for what looks to be an emerging area of focus for the supermajor in the region.Shell confirmed the farm-out and said it retains an 80% operated interest in the deepwater blocks, which it acquired in the most recent US Gulf lease sale. The UK firm declined to comment when asked about terms of the agreement.The deal follows previous recent moves by Shell to both consolidate and de-risk acreage in an emerging part of the US Gulf that is prospective for the high-pressure Lower Tertiary play, also known as the Paleogene.Just a handful of miles east of the latest Shell farm-out lies the Beacon Offshore-operated Shenandoah project, which is due on line in 2024. That project — which Shell is not currently involved in — comprises a new 80,000 barrel of oil equivalent per day facility and associated pipeline that will be the only production infrastructure in that zip code of the US Gulf, which is home to numerous existing discoveries and plenty of exploration to come, much of it led by Shell.Beacon was formed by private equity group Blackstone Energy Partners in 2016. Parent Blackstone reportedly pledged earlier this year to end investments in upstream oil and gas, making its long-term commitment to portfolio companies like Beacon an area to watch for a potential exit.Targeting the PaleogeneShell has yet to drill a successful well in the Lower Tertiary play but has quietly built up a position in the trend that could make it a fresh source of future growth.Its biggest splash in the Lower Tertiary came this summer when it agreed to farm in and take operatorship from Equinor of the project once known as North Platte, since renamed Sparta. That development could see a final investment decision in the coming months.Last month, Shell struck a separate deal with Equinor covering several exploration prospects that the London-based major will operate in the so-called Shenandoah “mini basin.” The first of those wells, Abilene, started drilling late last month. Repsol is a partner in a number of those prospects, including Abilene.This month’s Repsol deal — covering Walker Ridge blocks 4, 5, 48, 90, 91, 92, 134 and 135 — comprises acreage that sits directly between Shenandoah and Sparta, although closer to the former. Successful drilling on those blocks could potentially give Shell and its partners more development options through subsea tiebacks.Returning to the NeighborhoodShell acquired the eight Walker Ridge leases in 2021 in Lease Sale 257, which was vacated by a federal judge until this year’s Inflation Reduction Act reinstated the results of the sale. Shell was formally awarded the leases last month, federal records show.Shell actually held many of these blocks in its portfolio for years, until late last decade when each of the leases either expired due to a lack of exploration activities or were relinquished.The company did not comment on its future plans for these leases or a timeline for drilling. The leases are valid until at least 2032.Repsol did not immediately respond to a request for comment on Monday.