Exxon Mobil Corporation (XOM - Free Report) recently started a drilling program off the coast of Australia in the Gippsland Basin, to explore natural gas sources. The company is using the Ocean Monarch semi-submersible drilling rig of Diamond Offshore Drilling, Inc. (DO - Free Report) for this purpose.
The largest publicly-traded energy company has plans to drill two exploration wells – Baldfish and Hairtail – in the VIC/P70 block, which is part of its investment program in the lookout for new gas locations. The wells are expected to be drilled at water depths of 350-700 meters. Notably, ExxonMobil has sanctioned AUD$120 million ($88.3 million) for the drilling program.
The company, through its subsidiary Esso Deepwater Gippsland, holds full interest in the block, located around 90 kilometers off the coastal line. The drilling plan is scheduled for several months. Per the company, the objective of the program is to find trapped natural gas for supplying the domestic market of Australia. Moreover, to address the growing demand for gas in Australia, the company is considering an option of importing liquefied natural gas (LNG) in the east coast of the country.
Notably, 2019 will mark the company’s golden jubilee in the basin. ExxonMobil has BHP Billiton Ltd. (BHP - Free Report) as its partner in the basin. The partnership between the two companies started in 1964.
Headquartered in Irving, TX, ExxonMobil has gained 5.5% over the past year compared with 17% collective rally of the industry it belongs to.
Zacks Rank and a Stock to Consider
Currently, ExxonMobil carries a Zacks Rank #3 (Hold). Investors interested in the energy sector can opt for a better-ranked stock like McDermott International, Inc. (MDR - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Houston, TX-based McDermott is an equipment provider for energy companies. The company’s top line for 2018 is likely to improve 145% year over year. In the last four reported quarters, the company delivered an average positive earnings surprise of 101.7%.
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