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ExxonMobil (XOM) Drills New Oil Prospect Offshore Brazil

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Exxon Mobil Corporation (XOM - Free Report) is being engaged in drilling activities in a new prospect located off the coast of Brazil, per a presentation to investors by Murphy Oil Corporation (MUR - Free Report) . It stated that the prospect would likely comprise as much as 1 billion barrels of oil and gas.

The resource potential of the Cutthroat-1 prospect of the Sergipe-Alagoas Basin in Brazil is between 500 million barrels of oil equivalent (MMBoE) and 1,050 MMBoE. The drilling activities in the Cutthroat-1 prospect were started by ExxonMobil on Feb 20. The conclusion of upstream activities by ExxonMobil should be in the next few weeks.

In the prospect, ExxonMobil is the operator with a 50% interest, while 30% interest lies in Murphy Oil’s possession. In Brazil, this will be the first oil discovery of ExxonMobil as an operator, following the successful completion of exploration activities.

Other upstream operations, which could brighten up ExxonMobil’s production outlook, comprise its project pipeline centered around Permian and Guyana assets.

Murphy Oil also has lucrative upstream operations spreading across Eagle Ford Shale, US Gulf of Mexico and other prolific resources. Owing to efficient operations, Murphy Oil’s drilling and completion costs in the Eagle Ford shale play have been lowering over the years. This, in turn, is aiding the bottom line.

ExxonMobil currently sports a Zacks Rank #1 (Strong Buy), whereas Murphy Oil carries a Zacks Rank #3 (Hold). Meanwhile, two energy stocks that warrant a look are EOG Resources (EOG - Free Report) and Chevron Corporation (CVX - Free Report) . While EOG Resources carries a Zacks Rank #2 (Buy), Chevron flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

For this year, EOG Resources has laid out a plan to generate $6.4 billion in free cash flow at West Texas Intermediate crude price of $80 per barrel. EOG Resources has also committed to $1.7 billion in regular dividend payments.

With the employment of premium drilling, EOG Resources is reducing its cash operating costs per barrel of oil equivalent, aiding its bottom line.

In the Permian basin, Chevron has a strong footprint. The majority of Chevron’s assets in the most prolific basin of the United States has minimal royal payments, securing handsome cash flows in the long run.

In the past 30 days, Chevron has witnessed upward earnings estimate revisions for 2022.