The Department of Energy’s Office of Energy Dominance Financing announced the financial close of a 480 million dollar loan for Arena Energy’s Project Elkhorn on November 10. The borrower is Elkhorn Offshore, Arena’s wholly owned subsidiary formed to own the Southern Eugene Island production infrastructure in federal waters off Louisiana. The department describes it as its first closed loan supporting domestic oil and gas production.
The money funds brownfield work across 22 existing offshore platforms: retooling, refurbishing and repowering, processing and compression upgrades, expanded production and water handling capacity, returning idled platforms to service, and new subsea natural gas pipeline infrastructure. Offshore Magazine reports the financing is structured in up to five tranches through 2030, with future development drilling, routine operations and decommissioning outside the financed scope.
At peak, the project is expected to add up to 38,600 barrels of oil per day and up to 77 million cubic feet of natural gas per day. Arena currently produces about 30,000 barrels of oil per day in the Gulf. Over the project’s life the department projects about 125 million additional barrels of oil and 250 billion cubic feet of gas, and Arena says the work supports 2,800 jobs, including 400 operations roles and 2,400 construction jobs.
Arena will execute the work with its affiliated partners White Fleet Drilling and Rosefield Pipeline. The loan’s pricing and other commercial terms were not disclosed in the announcement.