Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

6 Key Oil & Gas Discoveries of 2013, and Who's Worth Owning

By

And those worth owning are not necessarily the ones who have made the biggest discoveries.

PrintPRINT
The pace of oil and gas exploration is frightening, and discoveries are weekly, if not daily, with volumes investors would only have dreamt of a decade ago. With each new discovery, it becomes difficult to keep track of the playing field, and even more difficult to rank the potential. There are also a lot of juniors popping up on the scene now, exploring, finding, and developing with the intent to lure the bigger players to buy them out. So we'll make it easy for you here, with our list of six key oil and gas discoveries so far this year, followed by a short list of the companies we think have the best potential-and they're not necessarily the ones who have made the biggest discoveries.

Last year, it was all about East and West Africa, with game-changing finds in Kenya, Mozambique, Angola, Ghana, and Ivory Coast that have sent explorers on a feeding frenzy looking for analog plays in the region and finding plenty. This year, so far, we like the discovery revival in the Gulf of Mexico and handful of new sub-salt and pre-salt plays.

6 KEY DISCOVERIES OF 2013

Shenandoah-2/Gulf of Mexico

In mid-June, Anadarko Petroleum (NYSE:APC) announced a major new discovery in this deep-water play: more than 500 million barrels of crude oil in the Shenandoah-2 well. This find is important: the implications are massive and this means we could be looking at a major oil rush in the Lower Tertiary trend. (Anadarko shareholders should be thrilled). And it wasn't easy (or cheap): Anadarko drilled through some six miles of rock in water at a depth of 5,800 feet.

The Lower Tertiary trend and its sub-regions could hold up to 15 billion barrels of oil. What this discovery means is that the US oil boom is far from over, and the Gulf of Mexico Lower Tertiary trend is still surprising us. Anadarko's find solidifies a trend that began with Exxon Mobil's (NYSE:XOM) 2010 discovery of the Hadrian field (700 million barrels); Royal Dutch Shell's (NYSE:RDS.A) discovery of the Appomattox field (500 million barrels); Chevron's (NYSE:CVX) discovery of the Moccasin field (200 million barrels); and BP's (NYSE:BP) discovery of the Mad Dog field (est. 4 billion BOE).

Coronado Prospect/Gulf of Mexico

In May, Chevron announced a new discovery at its Coronado prospect in the Gulf of Mexico, at the Walker Ridge Block 98-1 well. The well is some 190 miles off the coast of Louisiana in the Lower Tertiary sub-salt trend, in water of around 6,127 feet, but it's been drilled to a depth of 31,866 feet. (One of the deepest wells ever drilled and probably cost at least $250 million, though we don't know for sure.) The scale of the reserves is still under appraisal for commercial viability, and Chevron currently holds a 40% working interest in the prospect. Other owners of the Coronado prospect are ConocoPhillips (NYSE:COP) with a 35% stake, a subsidiary of Anadarko Petroleum Corp. with a 15% stake, and Venari Offshore LLC with a 10% stake.

Harpoon Discovery/Newfoundland

In mid-June, Norway's Statoil (NYSE:STO) announced it was evaluating a new discovery of high-quality oil off the coast of Newfoundland, about 500 kilometers northeast of St. John's. The Harpoon discovery is under some 1,100 meters of water. While we don't know the extent of the Harpoon discovery just yet, what we like is that it is only 10 kilometers from the earlier Mizzen discovery, which is estimated to hold between 100 million and 200 million barrels of oil. Statoil owns a 65% stake in Harpoon (the rest is owned by Husky (OTCMKTS:HUSKF)).

Offshore Cote d'Ivoire

In late April, France's Total SA (NYSE:TOT) announced a major discovery in the deep waters off the western coast of Cote d'Ivoire, encountering 91 feet of net oil pay while drilling in Block CI-100 in about 7,400 feet of water. It was the first block Total drilled. What is significant about this discovery is not the net feet of pay, but the fact that it confirms an extension of reserves in the Tano basin, home to the giant Jubilee field in neighboring Ghana. The Jubilee field is one of the richest oil fields in Africa with potential reserves eclipsing 1.8 billion barrels. This is the second major find in Cote d'Ivoire recently; last year Tullow Oil-which is also exploring in Ghana, made an offshore discovery here as well.

Gullfaks, North Sea

In April, Statoil said it could be sitting on 40-150 million recoverable BOE in the North Sea in its Gullfaks license, where it is still working to confirm its findings. Gullfaks is in the North Sea's Shetland Group/Lista Formation. The Gullfaks finds are younger, shallower deposits than its primary areas. Gullfaks has three permanent installations that have so far produced over 2.4 billion barrels of oil and over 56 billion cubic meters of gas. Statoil is the operator of the license, with a 70% interest, along with Petoro (30%). The Gullfaks discovery follows two other recent massive discoveries in the North Sea: Johan Sverdrup and King Lear.

Santos Basin/Libra, Brazil

In May, Petrobras (NYSE:PBR) doubled the estimate for its Libra field to 12-15 billion barrels. This makes it Brazil's largest ever discovery. Brazilian officials say it could easily produce a million barrels of oil per day once it is fully developed-that's twice the output of OPEC-member Ecuador. Production could begin in five years, with plans for up to 12-18 production vessels permanently anchored on the field, each of them pumping up to 30,000 barrels per day. For state-run Petrobras, which owns the field, it means more expenditures and more debt (and it's already drowning). The answer: Petrobras is taking the show on the road, preparing to offer foreign investors up to a 30% stake in this amazing prospect. (The Libra auction will take place in October, and 70% of the field will be up for grabs).
< Previous
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
PrintPRINT
 
Featured Videos

WHAT'S POPULAR IN THE VILLE