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U.S. oil major ConocoPhillips (COP - Analyst Report) has made a significant oil find in the deepwater Gulf of Mexico (GoM).

The WR98-1 Coronado wildcat exploration well – in Walker Ridge Block 98 – was drilled to a total depth of 31,866 feet, in 6,127 feet of water. The probe is located about 190 miles off the coast of Louisiana and about 12 miles southeast of the Shenandoah discovery. The Coronado well is still undergoing appraisal and further evaluation will be required to verify its full potential.

Chevron Corporation (CVX - Analyst Report) is the operator of WR98-1 with a stake of 40%. Other partners include ConocoPhillips, Anadarko Petroleum Corporation (APC - Analyst Report) and Venari Offshore LLC holding 35%, 15% and 10%, respectively.

The news came close on the heels of ConocoPhillips’ recent major oil discovery at its Shenandoah appraisal well 2 in the deepwater GoM. The well in the Shenandoah Basin – WR51-2 - encountered more than 1,000 feet of net oil pay in high-quality Lower Tertiary-aged reservoirs. The well – located at Shenandoah oil field in Walker Ridge Block 52 in the GoM – was drilled to 31,405 feet in about 5,800 feet of water.

ConocoPhillips’ exploration success in the prolific Lower Tertiary Trend is further substantiated with the Coronado discovery. The company holds the largest lease in the area with about 2 million net acres. Its remarkable results from the Coronado and Shenandoah discoveries prove the value of its portfolio in the GoM and highlight its future plans to grow organically.

In 2013, the company intends to drill 5–8 wells, including the Ardennes prospect and the Thorn well. Ardennes was spud in early March, while the Thorn is scheduled for drilling in the second quarter of this year. The Thorn well marks the company’s re-entry into the Gulf as an operator. ConocoPhillips remains on track with major growth projects expected to offset production declines and diversify its portfolio.

ConocoPhillips holds a Zacks Rank #3 (short-term Hold rating). Another energy stock Stone Energy Corporation (SGY - Analyst Report) holds a Zacks Rank #1 (Strong Buy) and is expected to perform better in the short term.

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