A Refreshing Dive Into Deepwater Leasing

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After a successful environmental review by the current administration on federal permits and leases, which followed a temporary permitting ban by the Biden administration, operations in the deepwater Gulf of Mexico have returned to normal — almost.

While there was little impact on existing offshore well permits, a decision which we believe resulted from the industry’s low intensities of greenhouse gas emissions from wells located in waters deeper than 1,000 feet relative to other North American regions, acquiring new leases is on pause for the foreseeable future. This has implications on future exploration and development plans, with many operators and investors grappling to understand which operators screen as well positioned in a no-new-lease environment.

We estimate that upwards of 80% of acreage held today is earmarked for exploration, meaning an ample inventory of prospects exist on current leases. However, identifying operators with long-dated leaseholds is critical to understanding a company’s future exploration targets. Enverus’ proprietary data and analytics allow clients to access company acreage by play type, providing a detailed look at what future exploration portfolios could look like if no new leases are granted for the next three to seven years within the Gulf of Mexico (Figure 1).

FIGURE 1 | Company Holdings of Gulf of Mexico Acreage Prospective for Lower Tertiary Targets

A Refreshing Dive Into Deepwater Leasing

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