Genesis Energy said during its earnings call May 7 that crude oil production from the four Phase 1 wells tied into its offshore Shenandoah floating production unit (FPU) dropped during the first quarter, causing it to revise its expectations for the remainder of the year. The company said the decline was related to efforts to optimize performance and preserve long-term volumes.
Genesis did not note current production volumes out of Shenandoah, although it said during its previous earnings call that production in Q4 2025 was near its target of 100 Mb/d.
“A step back from those early peaks is, in our experience, a fairly normal part of how these deepwater reservoirs behave. It does not change our fundamental view of what Shenandoah represents for Genesis over time,” CEO Grant Sims said. “That said, having now run the production from four wells through the system for almost nine months … we have revised our expectations for Shenandoah volumes for the rest of the year. The net effect to us is roughly $12 million-$15 million less segment margin from that field in 2026 versus what we had embedded in our original guidance for the year.”
Genesis said it expects the first well from its Monument development, a two-well subsea tie-back to Shenandoah, to be completed by the end of 2026, with the second well online in early 2027, followed by two more Shenandoah wells. In addition, its Shenandoah South development is progressing on schedule for first oil in H1 2028.
Development around the Salamanca FPU continues to progress. A fourth well was brought online in Q1, ahead of schedule, with a fifth to be drilled as early as Q4 2026, which could increase production there to 50-60 Mb/d.
Shenandoah is operated by Beacon Offshore Energy, while Salamanca is operated by LLOG. Both units are tied into Genesis’ 100% owned and operated SYNC and SEKCO laterals, respectively, for further transportation to shore through its 64% owned and operated CHOPS and Poseidon crude oil pipelines.
