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ExxonMobil Makes 15th Discovery in Stabroek Offshore Guyana

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Exxon Mobil Corporation (XOM - Free Report) has made another huge oil discovery in the Stabroek Block, located offshore Guyana. Days after Guyana’s first oil production from the Liza offshore field with the Liza Destiny FPSO vessel, the company announced the new hydrocarbon discovery at the Mako-1 well, located southeast of the Liza field.

The latest discovery marks the 15th one in the Stabroek Block. In the past few months, the largest publicly-traded energy mammoth has increased reserve estimates in the block to more than 6 billion barrels of oil equivalent. Notably, ExxonMobil considers deepwater Guyana and the booming Permian Basin as major growth drivers.

The new Mako-1 well consists of around 50 meters of high-quality oil-bearing sandstone reservoir. The well, drilled in 1,620 meters under water, is only 10 kilometers southeast of the Liza offshore field. This increases the probability of tied-back opportunities and additional developments.

Notably, the Liza Phase 1 development is expected to have a peak production capacity of 120,000 barrels of oil per day (BPD). The company is planning on bringing a second FPSO vessel for the phase 2 development. The Liza Unity FPSO vessel, expected to have a 220,000 BPD production capacity, is currently under construction. This May, ExxonMobil authorized the $6-billion Liza Phase 2 project that is expected to commence within mid-2022.

The third development, named Payara, is still awaiting approvals. It is located north of the Liza field and will have a FPSO vessel named Prosperity. Production from Payara can start in 2023 and reach the 220,000 BPD level. The company expects the whole Stabroek Block to produce 750,000 BPD by 2025 with the help of five FPSO vessels.

ExxonMobil owns a 45% stake in the Stabroek block, with Hess Corporation (HES - Free Report) holding a 30% interest. The remaining 25% stake at the block is owned by CNOOC Petroleum Guyana Limited, a subsidiary of CNOOC Limited (CEO - Free Report) .

Price Performance

ExxonMobil has gained 3.1% year to date against 1.3% decline of the industry it belongs to.

Zacks Rank and Stock to Consider

Currently, ExxonMobil has a Zacks Rank #3 (Hold). A better-ranked stock in the energy sector is CNX Resources Corporation (CNX - Free Report) , which has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CNX Resources’ earnings estimates for the current year have witnessed four upward revisions in the past 60 days versus no movement in the opposite direction.

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