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ExxonMobil (XOM) Makes New Discovery in Offshore Suriname

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Exxon Mobil Corporation (XOM - Free Report) recently announced a hydrocarbon discovery located offshore Suriname. It has found oil and gas at the Sloanea-1 exploration well in Block 52. The resource potential of the finding is being evaluated now.

The Sloanea-1 exploration well was drilled to a total depth of 4,780 meters with the help of the Maersk Developer rig. The Block 52 is located 75 miles north of Paramaribo, Suriname’s capital city. The block covers approximately 1.2 million acres, wherein water depth varies from 50-1,100 meters. While ExxonMobil has a 50% stake in the block, Malaysian oil and gas company PETRONAS is the operator and owns the rest of the stakes.

The latest discovery by ExxonMobil strengthens its presence in the South American region. It enables the company to build up on its Guyana-Suriname basin success. The company announced its intention of prioritizing deployment of capital to the advantaged assets that incorporates the South American basin, during November-end. Its expertise in the region is likely to help it to generate most value from the new discovery.

Notably, it made 18 world-class oil discoveries at the Stabroek Block, located off the coast of Guyana. In the block, the company estimates gross recoverable resource of nearly 9 billion oil-equivalent barrels. Moreover, the firm projects daily Guyana oil production volumes of more than 750,000 gross barrels by 2025, wherein it has Hess Corporation (HES - Free Report) and China’s CNOOC Limited (CEO - Free Report) as partners.

It is worth mentioning that following the government approval, ExxonMobil decided to proceed with the Payara field offshore development in Guyana. The energy major expects the development to produce up to 220,000 barrels of crude oil every day following start-up in 2024. It anticipates to utilize the Prosperity floating production, storage and offloading (FPSO) vessel for the development.

Price Performance

ExxonMobil has gained 20.8% in the past three months compared with 22.3% rise of the industry it belongs to.

Zacks Rank & A Stock to Consider

Currently, ExxonMobil has a Zacks Rank #3 (Hold). A better-ranked player in the energy space is Covanta Holding Corporation (CVA - Free Report) carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Covanta Holding’s bottom line for 2021 is expected to rise 95.3% year over year.

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