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ConocoPhillips Reports Promising Oil Discovery in Alaska

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Upstream oil giant, CoconoPhillips (COP - Free Report) reported the discovery of two new oil wells in the north eastern portion of the National Petroleum Reserve in Alaska on Jan 13, 2017. The discovery named as Willow is expected to produce around 100,000 barrels of oil per day.

The wells had been drilled early last year and commercial production is expected to initiate in 2023, subject to competitive project economies and permit approvals. The company has decided to commence the 3D seismic evaluations this month which are likely to bolster the initial tests and appraisal results.

The Willow discovery is located 28 miles west of a production facility, the Alpine Central Facility, which makes it a more economically viable find. The discovery is not only advantageous for ConocoPhillips’ global exploration strategy but is also beneficial for the state of Alaska. The development of Willow is a multi-billion-dollar investment, likely to create thousands of jobs in Alaska during the construction and production activities. Further it expects to generate hefty revenues for Alaska which relies excessively on oil revenues.

The working interest of the discovery is split between ConocoPhillips and Anadarko Petroleum Corp. where ConocoPhillips holds 78% stake and the rest 22% is held by Anadarko Petroleum. In a follow up to this discovery, the two companies have also acquired 594972 acres in the western North Slope of Alaska to further explore the region.

Both ConocoPhillips and Anadarko are major global exploration and production companies and carry a Zacks Rank #3. (Hold). The company outperformed the Zacks categorized Oil-Energy industry over the prior three months. During the aforesaid period, ConocoPhillips improved more than 24% while the broader industry gained around 6%.

Some of the better-ranked players in the industry include Halliburton Company (HAL - Free Report) and Penn Tex Midstream Partners, LP . Both these companies sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Halliburton has managed to beat the Zacks Consensus Estimate in each of the last four quarters with an average earnings beat of 61.20%.

Penn Tex is expected to post 140% year-over-year earnings growth for 2016.

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