Four years later, the shallow-water region has seen a whirlwind of deal-making as aggressive players snap up assets. According to the prominent energy consulting firm Wood Mackenzie, over the past year, merger-and-acquisition activity focused on the shallow-water Gulf of Mexico has totalled roughly $7 billion.
Late last year the private-equity-backed Fieldwood Energy closed its $3.75 billion deal for the shallow water assets of Apache, a big company with worldwide operations. Another aggressive player, Energy XXI, this month completed its $2.3 billion deal for EPL Oil & Gas. It also bought $1 billion worth of Exxon Mobil's assets in late 2010.
"It is a very significant amount of money for an area that is often forgotten about by a lot of people," said Jeremy Sherby, a research analyst with Wood Mackenzie.
While oil-and-gas giant Chevron remains a major shallow-water producer, and Exxon still has a small presence, a number of the so-called supermajors are no longer active in the region, which has been picked over for decades.
The biggest companies "sold massive amounts of the shelf properties to new, more aggressive, singularly focused [exploration and production] companies," said Jim Noe, an executive with the rig company Hercules Offshore. His customers now include shallow-water players that several years ago "didn't exist or you had never heard of them."
The activity among independent players in recent years may translate into an unexpected oil-production revival at a time when the industry is focused inland on the fracking-fueled shale energy boom and on the deepwater frontiers far from shore.
Shallow water-focused companies and analysts say a convergence of factors has led to the renewed interest in oil production.
"There is a big resurgence of the Gulf as far as the oil plays are concerned," said Greg Smith, vice president for investor relations with Energy XXI, who notes the company has more rigs currently active than ever before.
Oil prices are strong, while natural-gas prices — which unlike oil prices are not global — have tumbled over the last decade thanks to the inland U.S. fracking boom.
According to a recent investor presentation from Hercules Offshore, "As oil prices diverged from natural gas, [exploration and production] companies have shifted drilling program[s] to target oil."
"The economics are a lot better on an oil well than a gas well," Sherby said.
Sherby said companies that have been snapping up shallow-water assets are likely focused specifically on that region, compared to much larger firms that can make strong returns in inland shale plays like the Eagle Ford in Texas, or have the massive capital needed for deepwater projects.
"It is becoming a region dominated by specialty players," he said. "The buyers in these transactions are more likely to drill more and drill more aggressively."