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U.S. oil major Chevron Corporation (
- Analyst Report
announced that it carried out a production test at St. Malo PS003 well located in the deepwater Gulf of Mexico. The attempt was successful, with oil flow rate reported to be over 13,000 barrels per day.
Chevron has 51% ownership in the St. Malo field, while the other owners are Petroleo Brasileiro SA, or Petrobras ( PBR - Analyst Report ) , Statoil ASA ( STO - Analyst Report ) , Exxon Mobil Corporation ( XOM - Analyst Report ) and ENI, with interests of 25%, 21.5%, 1.25% and 1.25%, respectively.
Together with St. Malo, Chevron is conducting development of the Jack field in the deepwater Gulf of Mexico. According to Chevron management, the total estimated cost for the initial phase of development of both the projects is $7.5 billion. The St. Malo and the Jack fields are expected to come online in 2014.
Management believes that both the fields are expected to boost the output of the company after they start their production in 2014. The projects are also expected to produce energy for domestic purposes for decades.
Chevron has also spent $4.1 billion for the development of Big Foot project in the deepwater U.S. Gulf of Mexico. Production from this field is expected to start in 2014.
Management expects peak production from Jack, St. Malo and Big Foot fields to be roughly 100,000 barrels of oil equivalent per day.
San Ramon, California-based Chevron is one of the largest publicly traded oil and gas companies in the world, based on proved reserves. It is engaged in oil and gas exploration and production, refining and marketing of petroleum products, manufacturing of chemicals, and other energy-related businesses.
Chevron’s current oil and gas development project pipeline is among the best in the industry, targeting volume growth of 20% by 2017 – more than twice the rate of growth from 2003 to 2010 – driven by the big Australian gas projects (Gorgon and Wheatstone).
However, the company’s results are directly exposed to oil and gas prices, which are inherently volatile and subject to complex market forces.
Chevron currently retains a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next 1 to 3 months.
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