U.S. Energy Department Closes First Oil and Gas Loan: $480 Million for Arena Energy’s Project Elkhorn

The U.S. Energy Department’s Office of Energy Dominance Financing on Nov. 10 announced the financial close of a $480 million loan to Arena Energy for Project Elkhorn, marking the department’s first completed financing supporting domestic oil and natural gas production. The project will modernize 22 offshore platforms in the Gulf of America, off the coast of Louisiana, to expand production capacity and extend the useful life of existing infrastructure.

The upgrades are expected to add up to 38,600 barrels of oil per day and 77 million cubic feet of natural gas per day at peak production. Arena Energy, which currently produces approximately 30,000 barrels of oil daily offshore, estimates that the project will contribute an additional 125 million barrels of oil and 250 billion cubic feet of natural gas over its lifetime. The development is also expected to support 2,800 jobs, comprising 2,400 construction-related positions and 400 operations roles.

The financing reflects the administration’s broader effort to expand federal support for domestic energy production. The department is seeking to use federal financing to encourage investment in energy infrastructure and increase the availability of domestically produced fuels.

The transaction highlights a federal financing approach that extends to conventional oil and natural gas infrastructure alongside other domestic energy investments. By supporting upgrades to existing offshore facilities, the initiative seeks to increase output from established producing areas rather than relying exclusively on new developments. The project is expected to add approximately $1.6 billion in federal royalties over its lifetime, according to Arena Energy, although the department has not provided a construction completion date or an expected date for the additional production to come online.