Exxon Mobil Corporation (XOM - Free Report) recently made its 14th oil discovery off the coast of the South American nation Guyana. The company found oil at the Tripletail-1 well in the prolific Stabroek block, wherein recoverable resource was earlier estimated to be more than 6 billion barrels of oil equivalent. Notably, the latest oil discovery at the Tripletail-1 well is the sixth in the Turbot area.
The Tripletail-1 well, which is located about five kilometers northeast of the Longtail discovery, is drilled at a depth of 2,003 meters of water. ExxonMobil found around 33 meters of oil-bearing sandstone reservoir, which is rich in quality, at the site. Notably, Noble Corporation plc’s (NE - Free Report) Noble Tom Madden drillship was used to drill the well. It will next head for the Uaru-1 well, placed around 10 kilometers east of the famous Liza field. The Noble Don Taylor drillship has been awarded a one-year contract by ExxonMobil for work offshore Guyana that is expected to commence this October.
Significance of Offshore Guyana
ExxonMobil regards offshore Guyana as a key growth area. The latest discovery, which marks the fourth in the region this year, further strengthens the company’s upstream portfolio. Earlier, the energy major stated that the 26,800 square-kilometer Stabroek block has the potential to use more than five floating production, storage and offloading (FPSO) units. Total output from the block can exceed the 750,000 barrels of oil per day (BPD) mark by 2025.
Notably, another offshore Guyana project of the company — Liza Phase 1 development — is on schedule and expected to come online by first-quarter 2020. It will produce 120,000 BPD with the help of the Liza Destiny FPSO vessel, which arrived at the site during August-end. The Liza Phase 2 is anticipated to come online by mid-2022. Production from this project is expected to be 220,000 BPD, supported by the Liza Unity FPSO vessel. The company’s Payara prospect in the Stabroek block is expected to commence operations in 2023, with a projected output of 220,000 BPD.
Esso Exploration and Production Guyana Limited, a subsidiary of ExxonMobil, is the operator in the Stabroek Block with a 45% stake. The respective subsidiaries of Hess Corporation (HES - Free Report) and CNOOC Limited (CEO - Free Report) have 30% and 25% interest in the block.
Price Performance & Zacks Rank
ExxonMobil has gained 8.1% year to date against 0.9% decline of the industry it belongs to. The largest publicly-traded energy company currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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