Kosmos Energy (KOS - Free Report) recently announced completing drilling the Resolution exploration well in the U.S. Gulf of Mexico.
The drilling activity of the Resolution well, jointly owned by Kosmos and BP plc. (BP - Free Report) , unearthed reservoir quality sands. However, the primary exploration work led to a well holding water.
Resolution well was designed to examine an amplitude-supported sub-salt prospect in the underexplored western Garden Banks area. It is situated at nearly 1,968 feet under water and was drilled to a total depth of about 25,262 feet.
While the well will now be plugged and abandoned, Kosmos anticipates that drilling of the Resolution prospect will cost the company around $55 million in the fourth quarter.
News of this unsuccessful drilling of the Resolution well induced its share price depreciation by 6.5%, thereby dampening investor confidence.
Earlier in 2019, management announced that of the four wells in the “infrastructure-led” exploration program in the U.S. Gulf of Mexico this year, Resolution is one, the other three being Gladden Deep, Moneypenny and Oldfield.
Hamilton-based Kosmos, which is an exploration and production company, informed about its successful discovery of oil at Gladden Deep whereas the Moneypenny dig was unproductive.
The company is looking forward to spud the Oldfield prospect early next month wherein it owns 40% stake while the rest of the well is held by Hess Corporation (HES - Free Report) .
Further, it continues to upgrade its multi-year infrastructure-led exploration prospect inventory in the Gulf of Mexico with three-well drilling awaiting next year.
Zacks Rank & Key Pick
Kosmos currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the energy space is Shell Midstream Partners, L.P. (SHLX - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here
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