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

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

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WHO'S WORTH OWNING

Genel Energy

We can't get enough of Anglo-Turkish Genel (LON:GENL), which is advancing like a hurricane in Kurdistan (discovery after discovery and amazing drilling success), and also faring nicely in Africa. Shares in the company have advanced almost 50% over the past year on success in Kurdistan, and now it's about to hit the roof as its crude oil pipeline nears completion and is slated to start pumping crude to Turkey by the end of September. There is a short window of opportunity here to get in while this is still a bit undervalued. (And there are a number of undervalued stocks operating out of Kurdistan).

Genel is the largest producer in Iraqi Kurdistan, and its holdings are impressive. We're talking about seven production-sharing contracts with some nice geological diversity. Its largest producing fields in Kurdistan are Taq Taq and Tawke, which have an estimated gross proven and probable reserves of 1.4 billion barrels of oil and gross proven, and probable reserves of 1.9 billion barrels. By 2014, Genel is aiming for a production capacity of 140,000 net bopd.

Anadarko Petroleum

Anadarko has great onshore assets in the US Gulf of Mexico and diverse offshore, deep-water assets off the coasts of Algeria, Ghana, Mozambique, Brazil, China, Indonesia, and New Zealand, with proven oil and gas reserves at about 2,560 million BOE as of end 2012. We're looking at liquids-natural gas ratio of 46%-54%. For 2012, Anadarko saw a 10% increase in overall production. This year, Anadarko plans to spend some $5.5 billion developing its onshore US assets alone, and about $1 billion on its overseas plays. So we expect another nice increase in production for 2013. The company will shift its key activities a bit to account for low natural gas prices, so we'll see more focus and money spent on the Gulf of Mexico and less at the Marcellus shale, for instance. Anadarko is trading at $86.10 per share with a total market cap of more than $43.1 billion.

In the second week of June, shares of Anadarko rose 3.7% on the news of a major new discovery in the deep waters of the Gulf of Mexico (Shenandoah-2, mentioned above).

Noble Energy Inc

When you think about the Levant Basin these days, you think about Houston-based Noble Energy (NYSE:NBL). In late May, Noble announced a new discovery in the Mediterranean Sea, just 20 miles northeast of its Tamar field in its Karish well after drilling to a total depth of 15,783 feet. The well encountered 184 feet of net natural gas pay, and Noble thinks it potentially holds up to 2 trillion cubic feet of natural gas. This brings its estimated combined resources in the Levant Basin-including the Tamar and Leviathan fields-up to 38 trillion cubic feet of natural gas. Noble is definitely on a roll in the Levant Basin, and this latest discovery is its 7th so far in the eastern Mediterranean.

Back in the US, it's more good news for Noble. In mid-June, Noble confirmed that its second Gunflint appraisal well in the deep waters of the Gulf of Mexico had an estimated gross resource of 65-90 million bbl of oil equivalent. This means Noble's plans for a subsea tieback development at Gunflint are a green light for this year. Production is targeted for the end of 2015 at both Noble's Gunflint and Big Bend deep-water discoveries in the Gulf of Mexico.

Oryx Petroleum Corporation

Sorry, but it's got to be Kurdistan-again, but this time Oryx (TSE:OXC), a company we've written about before but you may not have heard of. If you haven't you're missing out. About a month ago, Oryx-the upstream division of AOG-offered up 17% of its shares (16,700,000 common shares) on the Toronto Stock Exchange for C$15 per share) with gross proceeds of $250 million. The proceeds will allow Oryx to complete its exploration and appraisal plans through mid-next year, and they expect some serious results over the next 12 months.

Oryx is the brainchild of Swiss billionaire Jean Claude Gandur, who made his grand entrance onto the oil and gas scene in 2008 with the sale of Addax Petroleum to China's Sinopec for $7.2 billion. Since then, he's been out of the fossil fuels game-so Oryx is his re-entry ticket. Gandur owns 77% of Oryx through AOG.

Oryx is exploring in west Africa and Iraqi Kurdistan, but it's the Kurdistan assets we really like. Gandur is an excellent diplomat who can navigate power brokers, which will make or break a junior company in this territory. Oryx isn't making any money yet, but it will, and that's why we think now is the time to get in on this. It could very easily go the way of Addax, which was making about $300 million annually in net income when it was sold to Sinopec. Gandur has dumped $700 million into Oryx, which has been busy buying up licenses and drilling wells. It's sitting quite nicely in Kurdistan right now with a 100% focus on oil and 143 billion bbls of proven oil reserves.

This article was written by Premium Analysts of Oilprice.com.
No positions in stocks mentioned.
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