Beacon Offshore acquires LLOG's stake in Shenandoah and Yucatan

Beacon Offshore Energy has signed an agreement to acquire LLOG's 30.95% working interest and operatorship of the pre-FID Shenandoah field. No deal consideration was announced, but we model the asset as having material value. Beacon will also acquire LLOG's 27.08% interest and operatorship in the nearby Yucatan discovery. Beacon has been positioning itself to grow in the US GoM. The company recently took over operatorship of six assets and began a drilling campaign in January 2020. Beacon is a new operator in the US GoM and the Shenandoah project poses higher risks as it will require 20,000 psi-rated equipment to develop, but the deal could prove transformational and triple Beacon's current production by 2024. For LLOG, the transaction redirects its capital commitments to Leon and Moccasin projects, which we expect to reach FID in 2021.