Oil giant ExxonMobil Corporation (XOM - Free Report) has announced the discovery of oil deposits offshore Guyana. Turbot-1 well represents the fifth oil discovery in the region.
The Stena Carron drillship, which was used to drill Turbot-1 well, will move to the Ranger prospect after the completion of the well. Another well is intended to be drilled in 2018 on the Turbot discovery.
On Aug 14, 2017, ExxonMobil’s affiliate Esso Exploration and Production Guyana Ltd started drilling the Turbot-1 well. The company discovered a reservoir of 75 feet (23 meters) of superior, oil-bearing sandstone in the main objective. On Sept 29, 2017, the well was drilled to reach a depth of 18,445 feet (5,622 meters) in 5,912 feet (1,802 meters) of water.
Located in the southeastern portion of the Stabroek Block, the Turbot-1 well is located about 30 miles (50 kilometers) to the southeast of the Liza phase one project. In fact, ExxonMobil’s Stabroek Block spans across acreage of 6.6 million (26,800 square kilometers). While the company holds 45% in the Stabroek Block, the other partners include Hess Corporation (HES) and CNOOC Ltd (CEO) holding 30% and 25% interest, respectively.
Markedly, ExxonMobil’s presence in Guyana dates back to 2008 when it initiated oil and gas exploration activities. The company, however, drilled its first exploration in 2015.
In May 2015, the company announced its first oil and gas discovery in the country. The earlier discoveries in Guyana include Liza, Payara, Snoek and Liza Deep. All these discoveries are located in the Stabroek Block.
ExxonMobil has a leading position in the energy industry owing to the size and diversity of asset base, both in terms of business mix and geographical footprint. With a stable cash position, the company’s balance sheet is among the best in the industry. Owing to its integrated functions, the company is susceptible to risks arising from weakness in the global economy. Moreover, dependence on costly offshore drilling might dent ExxonMobil’s cash flow. Shares of the company have gained 2.3% compared with the industry’s growth of 10.5% over the last three months.
Zacks Rank & Key Picks
Currently, ExxonMobil carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the energy sector include First Solar Inc (FSLR - Free Report) , Lonestar Resources US Inc (LONE - Free Report) and Alliance Holdings GP LP (AHGP - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
First Solar, based in Tempe, AZ, designs, manufactures and sells solar electric power modules using a proprietary thin-film semiconductor technology. The company delivered an average positive earnings surprise of 524.24% over the last four quarters.
Lonestar Resources is an oil and gas company, headquartered in Fort Worth. The company pulled off an average positive earnings surprise of 62.5% in the preceding quarter.
Alliance Holdings, headquartered in Tulsa, OK, is involved in producing and marketing coal. The firm came up with an average positive earnings surprise of 13.64% over the last four quarters.
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