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U.S. energy company, ExxonMobil Corporation (XOM - Free Report) surprised the market with a 0.5% fall in share price. This followed the announcement of the discovery of oil and gas in an unconventional shale well in Neuquén Province of Argentina by ExxonMobil’s affiliate, ExxonMobil Exploration Argentina, in partnership with the provincial government’s energy company Gas y Petroleo del Neuquén.

Located in Argentina's vast Vaca Muerta, shale formation in the liquids-rich province of Neuquén, the Bajo del Choique X-2 well was drilled to touch a total depth of around 15,000 feet (4,570 meters). The horizontal leg of the well extends 3,280 feet (1,000 meters).

The well is being tested by ExxonMobil to appraise the discovery. The well flowed at an average rate of 770 barrels of oil a day on a 12/64 inch choke in its initial test. Further, data analysis and studies are being carried out to fully assess this discovery. Prior to making any commercial decision, appraisal wells are required to be drilled as it is believed that all shales are not alike.

According to the U.S. Energy Department's Energy Information Administration, Argentina is estimated to hold technically recoverable shale gas resources of 802 trillion cubic feet and estimated shale oil reserves of 27 billion barrels. Owing to the rich Vaca Muerta region, Argentina ranks second in the world for shale gas reserves and fourth for potential shale oil reserves.

Vaca Muerta came into focus globally after Chevron Corp (CVX - Free Report) and Argentina's state-run oil company, YPF SA entered into a $1.5 billion joint venture to explore shale oil and gas deposits in the formation.

ExxonMobil, the operator of the Bajo del Choique Block, has 85% interests while its partner, Gas y Petroleo del Neuquén holds the remaining 15%.

ExxonMobil Exploration Argentina holds interests in approximately 900,000 net acres in the unconventional shale oil and shale gas plays of the Vaca Muerta in Neuquén Province.

ExxonMobil currently carries a Zacks Rank #3 (Hold). Some better-ranked oil and gas stocks that look promising include Encana Corp (ECA - Free Report) and Matrix Service Company (MTRX - Free Report) . Both these stocks sport a Zacks Rank #1 (Strong Buy).

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