The US Department of Energy (DOE) Nov. 10 closed on a $480 million loan for Arena Energy's Project Elkhorn to expand offshore oil and natural gas production in the Gulf of Mexico, marking the department's first completed loan supporting domestic oil and gas production.

The financing reflects the Trump administration's expanded use of federal loan authority to support conventional fossil fuel development. DOE said the loan was made possible by provisions of the administration's 2025 tax and spending legislation.

Arena expects to modernize 22 offshore platforms off Louisiana and add up to 38,600 b/d of oil and 77 MMcfd of natural gas at peak production.

The company estimates the project will produce an additional 125 million bbl of oil and 250 bcf of natural gas over its lifetime, generating $1.6 billion in additional federal royalties.

Arena said it will use the financing to “retool, refurbish, repower and expand capacity” at offshore platforms in the Southern Eugene Island area.

“The Southern Eugene Island area is one of the most prolific oil-producing regions in American history, and its infrastructure still has decades of productive life ahead,” Mike Minarovic, the company’s chief executive officer, said in a statement. He added that the company was founded on the belief that mature fields in the Gulf still hold substantial production potential.

Project Elkhorn will return idled platforms to service and expand production and water-handling capacity at active infrastructure. The project also includes development of new gas pipeline infrastructure to connect future wells to existing pipeline systems, Arena Energy said.

The loan closing follows completion of the technical, legal, environmental, and financial due diligence required under DOE's loan program, the company added.

Arena Energy, an independent producer focused on shallow-water development, currently produces about 30,000 b/d of oil offshore in the Gulf. The company said it will develop Project Elkhorn with its longtime affiliated partners, White Fleet Drilling and Rosefield Pipeline.