U.S. energy company Hess Corporation (HES - Free Report) has struck oil in the exploration well – Pecan-1 – in Deepwater Tano/Cape Three Points license, offshore Ghana. The find came across 245 net feet of oil pay in two separate Turonian intervals.
The Pecan-1 well was drilled to reach a total depth of 15,420 feet in water depth of 8,245 feet. A widespread data acquisition program was carried out and the well was sidetracked to attain bypass cores. Currently, the well is being suspended.
Hess has made five discoveries in the block including Pecan-1. Other finds include Almond, Beech and Hickory North that encountered 53 net feet oil pay, 146 net feet oil pay and 98 net feet gas condensate pay, respectively, and Paradise, which hit 120 net feet oil pay and 295 net feet gas condensate pay.
The company has a 90% stake in the block, while the remaining 10% is held by Ghana National Petroleum Corporation. The company proposes to perform pre-development and more exploration operations in 2013.
Subsequently, Hess intends to drill the Cob prospect, situated about 15 miles northeast of the Pecan-1 discovery.
This new oil find establishes Hess’ hold in the emerging oil rich region. In the recent past, the company has accelerated its spending to finance its massive exploration program, which has also witnessed a couple of dry holes. In order to reduce its exposure to risky areas, Hess is focusing on its new strategy of engaging in high-impact exploration areas.
Hess, which recently entered into an agreement with Royal Dutch Shell plc (RDS.A - Free Report) to sell its interest in the Beryl area fields and the Scottish Area Gas Evacuation System for about $525 million, holds a Zacks #3 Rank that is equivalent to a Hold rating for a period of one to three months. Longer term, we maintain our Neutral recommendation.