Summary
- On September 8, 2020, U.S. oil companies Exxon Mobil and Hess Corp. indicated that they had made two more oil discoveries offshore Guyana.
- The Payara-Pacora phase requires government and regulatory approvals, and it is a costly problem for Exxon.
- XOM is a reliable company that should be accumulated for the long term; however, trading short term the stock is a priority now.
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Image: The FPSO Liza Destiny Credit: Hess Corp
Exxon Mobil Announced Two More Discoveries in the Stabroek Block Off Guyana
Note: This article is an update of my article published on Seeking Alpha on December 24, 2019.
On September 8, 2020, U.S. oil companies Exxon Mobil (NYSE:XOM) and Hess Corp. (NYSE:HES) indicated that they had made two more oil discoveries offshore Guyana. The Stabroek block is an ultra-deepwater field due to the water depth, and it requires a floater called a drillship to drill the wells with day rate costs of about $200K-$220K per day, and it is cheap.
- The drilling at Yellowtail-2 produced the 17th discovery of supplementary reservoir intervals close to the Yellowtail-1 discovery. The Yellowtail-2 encountered 69 feet (21 meters) of high-quality, oil-bearing reservoirs.
- The Drillship Noble Don Taylor drilled the Redtail-1 well from Noble Corp. (OTCPK:NEBLQ). The well was successful and produced the 18th discovery in the Stabroek block off Guyana. The well encountered approximately 232 feet (70 meters) of high-quality, oil-bearing sandstone and was drilled in 6,164 feet (1,878 meters) of water. It was the U.S. oil major's 18th discovery in the Stabroek block offshore Guyana and will supplement the estimated gross discovered recoverable resource recently raised to 8 billion Boe.
On January 27, 2020, Exxon Mobil increased its estimated recoverable resource base in Guyana to more than 8 billion oil-equivalent barrels. It made the 16th oil discovery northeast of the producing Liza field at the Uaru exploration well.
The Uaru encountered approximately 94 feet (29 meters) of high-quality oil-bearing sandstone reservoir. The well, drilled in 6,342 feet (1,933 meters) of water.
It is simply amazing how prolific the Stabroek block has been since it began in May 2015 with the Liza-1 well:
In May 2015, Exxon Mobil announced it made a significant oil discovery with the Liza-1 exploration well on the Stabroek block about 120 mi (193 km) offshore in the Guyana-Suriname basin.
The block operator is Esso Exploration & Production Guyana Ltd., which is a subsidiary of Exxon Mobil, which owns 45% working interest. The company has two partners: Hess Guyana Exploration Ltd., which is a subsidiary of Hess Corp. with 30% working interest, and CNOOC Nexen Petroleum Guyana Ltd. with a 25% working interest.
