We are sometimes so focused on unconventional production that, in discussing U.S. oil production trends, we’re almost perplexed when the subject of offshore output comes up. Yes, we have to remind ourselves, the Gulf of Mexico is not only still pumping oil but raised output by 150,000 barrels per day from December 2014 to December 2015.

As with other major projects, delivering new offshore volumes requires financing—a currency that’s become increasingly precious as cash flows have shrunk with plummeting crude prices. So what more opportune time to introduce another financing option for Gulf of Mexico projects than the current tough period?

In December 2015, the investment banking arm of Société Générale, working with Cobalt International Energy Inc., announced it had provided the “first single-field development financing in the Gulf of Mexico.” The financing provided an initial facility of $150 million to support development of Cobalt’s 9.375% working interest in Heidelberg Field, which is operated by Anadarko Petroleum Corp. The first Heidelberg well came online in January, and by late February all three initial wells were producing. Production was “ahead of schedule and within budget,” said Cobalt CEO Joe Bryant.

Kevin Price, Société Générale’s global head of reserve-based finance, noted the project finance loan structure had been used “for decades in the international bank markets to fund the development of large offshore oil and gas fields.” Price cited its use in financing development of numerous fields in the North Sea, as well as development of a major gas field offshore India by Niko Resources Ltd. and, more recently, Kosmos Energy Ltd.’s Jubilee Field offshore Ghana.

As with earlier examples, Cobalt’s financing takes the form of an individual project finance loan and is made through a special purpose vehicle with recourse limited to Cobalt’s net interest in the Heidelberg project. Financing is typically subject to field appraisal being completed and a development plan being finalized.

“The project must be clearly defined before one can finance it,” said Price. “This kind of financing is particularly suited to a large asset that is well-appraised and has strong economics.”

As for costs, “it’s more expensive than traditional North American reserve-based lending, but it’s a lot cheaper than mezzanine, and it’s cheaper than second lien paper, as well,” commented Price. SEC filings indicate the cost of Cobalt’s facility includes a rate based on Libor plus 6% prior to project completion, and Libor plus 4% after completion, per the loan agreement.

Referencing the Heidelberg Field development loan, Bryant described Cobalt’s “inaugural financing in the senior secured bank market” as a “first-of-its-kind.” Successful execution of the transaction provided “a foundation for future development financings, thereby broadening our options.”

Such options may come in handy for Cobalt, which is facing ongoing uncertainty over the sale of its Angola assets. Cobalt agreed last year to sell Angola blocks 20 and 21 to the state-owned oil company, Sonangol, for $1.75 billion, but the timing of closing remains unclear. Pending a sale, Cobalt held cash and equivalents of about $1.2 billion at year-end 2015, including an initial payment of $250 million from Sonangol.

Cobalt has stated its belief that the Angola asset sale will close, citing Sonangol’s history of honoring energy contracts that it executes. A provision in the purchase and sale agreement requires the government to approve the contract by Aug. 22, 2016, or the parties are restituted to their original positions.

Meanwhile, in the Gulf of Mexico, Cobalt estimated that it has a net discovered resource of 500- to 650 million barrels of oil equivalent at its North Platte, Anchor and Shenandoah discoveries. Each of these has an additional appraisal well planned or in process. A Morgan Stanley report suggested Cobalt has sufficient liquidity to manage through 2016 and 2017 without the Angola sale, albeit with tightening liquidity.

While it’s unlikely that any projects in the Gulf of Mexico are sufficiently mature to yet warrant financing in the senior bank market, having an additional funding option can’t hurt in times of uncertainty, with every saving adding liquidity.

Assuming an oil price recovery, what’s the potential for future project financings in the Gulf? “Clearly, the Heidelberg loan to Cobalt offers a potential template for similar transactions in the future,” said Price. “But it’s not a cookie-cutter product. It’s much more bespoke. Every deal is unique.”

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