Equinor Sells '20k' US Gulf Assets to Beacon

Equinor has sold its interest in three undeveloped discoveries in the US Gulf of Mexico to private operator Beacon Offshore Energy after the Norwegian giant determined the Walker Ridge projects did not compete for capital in its portfolio.

The sales were completed earlier this year in “a series of transactions” for fields close to Shenandoah, a Beacon spokesperson confirmed. Beacon is planning to install a floating production platform at Shenandoah, with start-up due by the end of 2024.

The transactions included Equinor’s 50% operated interest in acreage surrounding the Monument field, where Equinor drilled a discovery well in 2020 and a successful appraisal well last year, although detailed results of the appraisal were never disclosed.

Now Beacon says it intends to move ahead on Monument, with first production as soon as 2026.

To accommodate future flows from Monument, Beacon and its partners have decided to expand the nameplate design capacity of the Shenandoah platform, which is being built by Hyundai Heavy Industries in South Korea. The facility will now be designed to process up to 120,000 barrels per day of oil, up from 100,000 b/d previously, a spokesperson told Energy Intelligence.

“The Monument partners have approved an initial development plan that is expected to result in production via subsea tie-back to the Shenandoah platform in 2026, pending approval of a suspension of production,” the spokesperson said.

Beacon now leads a group of international partners at Monument that includes Spanish firm Repsol and Malaysian national oil company Petronas. Subsequent to the Equinor deal, Beacon farmed down some of its Monument interest to Israeli player Navitas Petroleum, which was already involved at Shenandoah.

Shenandoah is vying with Chevron’s Anchor project to be the first in the world to produce from the Gulf of Mexico’s ultra-high-pressure Lower Tertiary trend, home to numerous large discoveries that have been technically inaccessible until relatively recently.

Monument’s pressure levels are believed to be just below the 20,000 psi (20k) threshold of fields like Shenandoah and Anchor, but Beacon’s experience with the complexities posed by this type of project will likely prove invaluable as Monument’s development progresses.

Taking Control: Beacon Expands Near Shenandoah

Equinor's Priorities

Equinor’s decision to exit Monument and two other nearby fields is likely influenced by planned capital commitments at another Lower Tertiary 20k project, the Shell-led Sparta scheme, a few dozen miles to the west of Shenandoah. Shell and Equinor intend to take a final investment decision at Sparta by the end of this year, with start-up expected around 2027.

“The [sale to Beacon] aims to capitalize on assets that have been de-prioritized in our portfolio and face near-term license expiry deadlines,” an Equinor spokesperson told Energy Intelligence.

The agreements with Beacon also included Equinor’s 60% operated stake in the Coronado field, leaving US independent Talos Energy as a 40% partner and Beacon as operator. Equinor also sold its 11.25% stake in Yucatan, where Beacon was already a partner along with Navitas Petroleum and US private Houston Energy, another Shenandoah partner.

Coronado and Yucatan are both considered “20k” fields and are both less than 10 miles from Shenandoah; Monument is about 18 miles to the south.

“Further evaluation of Coronado and Yucatan discoveries will be required to optimize their potential development,” the Beacon spokesperson said. “The Shenandoah [floating production system] … represents the logical host facility for current and future discoveries in the northwest Walker Ridge area.”

In total, Equinor divested eight leases and parts of two others to Beacon.

Equinor has not had much success as an operator in the US Gulf, but it remains one of the region’s largest producers, holding equity production of around 140,000 b/d from 10 producing assets, almost all of them non-operated.

The spokesperson said the US Gulf “remains a core area for Equinor.”