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BP's Yields From Ravenspurn Well Operation Disappointing

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BP plc's (BP - Free Report) Ravenspurn well, located in the North Sea, has provided disappointing results, following which BP discontinued the exploration project. Although the company found little traces of gas, the project was declared unsuccessful.

Integrated oil giant BP, was examining the potential of a deep horizon several hundred meters beneath the mature reservoirs of Ravenspurn North field, which is from the Carboniferous age. Per Bp, had the results been positive, it would have opened up new opportunities in the region. The company started drilling in December 2016.

Rowan Companies plc’s Rowan Gorilla VII jack-up was working on the site, which has been demobilized by BP following its decision to stall operations in the Ravenspurn well. BP owns 85% interest in the project while Anglo-French oil and gas company Perenco holds 10% and Premier Oil PLC owns the remaining 5%.

In other news, a unit of BP has agreed to pay $102 million to settle a lawsuit from the California state. The company was accused of overcharging the state for natural gas.

Price Performance

BP has gained 14.6% over a year compared with 10.6% growth of its industry.

 

About BP

London-based BP is among the leading integrated energy players in the world. The firm has a portfolio of major upstream projects, likeClair Ridge, Juniper and Mad Dog Phase 2 developments that are expected to fetch significant cash flows. The company anticipates the projects to add 800 Mboe/d to net production capacity by 2020, once they are online. It is to be noted that 90% of these upstream developments are either under construction or are completed.

However, BP announced divestitures of several non-core assets that comprise interests in many North Sea oil and gas fields and in SECCO joint venture in China. For 2016, the company generated revenues of $3.2 billion from divestment activities. Also, BP projects asset sale worth $4.5-$5.5 billion for 2017. The huge property sale forecasts raise concerns with respect to the company’s production in the coming years.

Zacks Rank and Stock to Consider

BP carries a Zacks Rank #3 (Hold).

A better-ranked stock in the oil and energy sector is Cabot Oil & Gas Corporation , which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Houston, TX -based Cabot is an independent energy company. Its sales for the fourth quarter of 2017 are expected to grow 39% year over year. Earnings for the year 2017 are expected to be up 357.14%.

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