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Exxon to Drill Liberia Block 13

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Oil giant ExxonMobil Corporation’s (XOM - Free Report) Liberian affiliate has finally completed the acquisition of an 80% interest in Liberia Block 13 (LB-13) from Canadian Overseas Petroleum (Bermuda) Ltd. (COPL). Liberia Block 13 is 18 miles (30 kilometers) offshore Liberia’s central coast.

Located offshore Liberia in water depths between 250 feet and 10,000 feet, LB-13 spans over 625,000 acres (2,500 square kilometers). After receiving final approvals from the Liberia national legislature and Liberia President, the transaction closed on Apr 5, 2013.

ExxonMobil will be the operator of LB-13, while COPL will hold a 20% interest in the block. With an intention to begin complying with the requirements of the production sharing contract, ExxonMobil intends to open its venture office in Liberia’s capital Monrovia within a period of 180 days. The contract requires the company to drill an exploration well within three years.

The contract is a key milestone achieved by the company in its efforts to develop the hydrocarbon resources of the region. ExxonMobil’s capability to develop resources will help the government of Liberia to work for the benefit of the region. Liberia’s emerging oil industry offers numerous prospects and the company’s entry at this point positions it advantageously.

Recently, ExxonMobil announced its plan to develop a huge floating liquefied natural gas project (FLNG) to process gas from its Scarborough field, off the coast of Western Australia. The project was in response to the rising cost of setting up LNG plants onshore Australia.

ExxonMobil holds a Zacks #3, which is equivalent to a short-term Hold rating. However, the Zacks Ranked #1 Stone Energy Corp (SGY - Free Report) , Range Resources Corporation (RRC - Free Report) and NGL Energy Partners LP (NGL - Free Report) are expected to outperform the market over the next few months.

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