Exxon Mobil Corporation (XOM - Free Report) continues to gain from holding in some of the most prolific upstream global assets, particularly the Stabroek Block. The asset’s exploration potential was ascertained again with the 10th discovery at the Pluma-1 well, offshore Guyana.
With the recent discovery, the combined gross recoverable resources have been increased to more than 5 billion oil-equivalent barrels, up from the prior projection of more than 4 billion oil-equivalent barrels.
Pluma-1 well is the sixth find on the Stabroek Block in the past year. Located about 17 miles south of the Turbot-1 well, it encountered about 121 feet (37 meters) of superior, hydrocarbon-bearing sandstone reservoir. The drilling of the well commenced on Nov 1, 2018, wherein the Noble Tom Madden drillship was used to reach a total depth of 16,447 feet (5,013 meters) in 3,340 feet (1,018 meters) of water. Subsequently, the Noble Tom Madden will drill the Tilapia-1 prospect located 3.4 miles (5.5 kilometers) west of the Longtail-1 well.
The previous outstanding discoveries on the Stabroek Block include Liza, Payara, Liza Deep, Snoek, Turbot, Ranger, Pacora, Longtail and Hammerhead-1. Currently, results of Longtail are under appraisal. The discoveries made on the Stabroek Block have the potential to add about five floating production, storage and offloading (FPSO) vessels that are capable of yielding more than 750,000 barrels per day by 2025.
The first oil from the Liza Phase 1 is anticipated by early 2020. It will use the Liza Destiny FPSO vessel, whose construction is underway, to produce about 120,000 barrels of oil per day. Phase 2, which awaits the necessary approvals, is scheduled to complete all formalities by early 2019 and start by mid-2022. Phase 2 will use a second FPSO to yield about 220,000 barrels per day and is projected to start production in 2022. With the targeted sanctioning in 2019, a third development — Payara — will use an FPSO intended to produce about 180,000 barrels of oil per day as early as 2023.
Stabroek Block has acreage of 6.6 million (26,800 square kilometers). Exxon’s affiliate, Esso Exploration and Production Guyana Limited, holds 45% interest in the Stabroek Block as the operator. Hess Corporation (HES) holds 30% and CNOOC Limited (CEO) holds 25% interest.
Exxon and its partners have fortified their foothold on an ever-expanding oil field offshore Guyana. Hess is likely to benefit from availability of octane in the ever-expanding reserves offshore Guyana, which is used to produce heavier naphtha components appropriate for reforming.
Zacks Rank & Key Picks
Currently, ExxonMobil carries a Zacks Rank #3 (Hold).
A few better-ranked players in the same sector are Eni SpA (E - Free Report) , Enterprise Products Partners L.P. (EPD - Free Report) and SunCoke Energy, Inc (SXC - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Rome-based Eni is among the leading integrated energy players in the world. The company delivered an average positive earnings surprise of 16.7% in the last four quarters.
Headquartered in Houston, TX, Enterprise Products Partners is among the leading midstream energy players in North America. It pulled off an average positive earnings surprise of 9.3% in the last four quarters.
SunCoke acquires, owns and operates the coke making and coal mining operations. The company delivered an average positive earnings surprise of 302.6% in the last four quarters.
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