Oil Exploration Discoveries Made By Exxon In Deepwater Gulf

oil,gulf,deepwater,exxon,new,barrels,discoveries,region,corp,drilling,oil exploration,deepwater gulf

Oil Exploration Discoveries Made By Exxon In Deepwater Gulf 3 new wells could produce 700 million barrels of oil.

According to Reuters, two oil exploration discoveries Exxon Mobil Corp have been made in the Deepwater Gulf. The two new large oil discoveries, as well as a natural gas discovery in the Gulf of Mexico deepwaters, highlights the importance of the deepwater area of the Gulf of Mexico’s importance to U.S. crude oil output. Exxon reported that the newly discovered wells could produce approximately 700 million barrels of oil equivalent, or BOE. According to Houston, Texas based Triple Double Advisors analyst John White, “Seven hundred million barrels doesn’t happen very often, that’s a lot of oil.” The newly discovered wells are located in the Keathley Canyon at a depth of roughly 7,000 feet, and is 250 miles southwest of New Orleans. Exxon has yet to finish its development plan, and stated that more drilling will be necessary to further gauge how much oil is in the new reservoir. This won’t give us a break at the gas pumps anytime soon, as normal production could still be years away.

After last years Deepwater Horizon spill, the U.S. government halted gas and oil exploration. Current activity in the Gulf region remains well below the levels that we were experiencing prior to the oil spill. The oil discoveries are the first by Exxon in the Gulf region since the government moratorium was lifted. The Irving, Texas, based company was on the verge to begin drilling in the Hadrian prospect when the government suspended all deepwater activity following the Deepwater Horizon spill. Exxon is a 50 percent interest owner in the three new oil and gas wells, which are part-owned by Eni Petroleum U.S., part of Italy’s Eni SpA (ENI.MI), and Brazil’s Petrobras (PETR4.SA).

Energy industry consultant Matt Routt from KBC Advanced Technologies was quoted as stating “(The discovery) speaks to the fact there are resources in the Gulf and if we have a tax and regulatory environment that will encourage us to find and produce our own domestic oil, the industry will respond.”

The deepwater region of the Gulf of Mexico contains the lower tertiary geological formation which stretches across the deepwater Gulf. This region is estimated to contain as many as 15 billion barrels of oil. Other recent large discoveries in the vicinity include BP Plc’s (BP.L) Kaskida, which is estimated to hold as much as 3 billion barrels of oil. At the end of last year, the Irving, Texas-based Exxon Mobil Corp. had reserves of 24.8 billion barrels of oil equivalent. Last month, Noble Energy Inc (NBL.N) said that it had made it’s own oil discovery at the Santiago prospect also in the Gulf of Mexico deepwater region. U.S. regulators issued the first new drilling permit to Noble after the government moratorium on drilling. The other oil industry players in Keathley Canyon include Anadarko Petroleum Corp (APC.N) and Chevron Corp (CVX.N).

Exxon shares were up 1 percent in Wednesday afternoon trading after the oil exploration discoveries were made public, resulting in Exxon shares climbing 83 cents to $80.83 for Wednesday afternoon on the New York Stock Exchange. The stock was outperforming a flat CBOE index of oil companies (.OIX).

Leave a Reply

Your email address will not be published.