Conoco Strikes North Sea Gas - Analyst Blog
12 Dicembre 2011 - 3:15PM
Zacks
ConocoPhillips
(COP) announced the discovery of gas at the Peking Duck prospect in
the southern North Sea off Norway. However, the company did not
reveal the estimated amount of gas found.
In its first drilling on the block,
ConocoPhillips’ 7/11-12 S wildcat hit a 40-metre gas column in a
Jurassic reservoir in the Ula formation. The reservoir quality in
Triassic rocks was substandard than expected. The other wildcat
7/11-12 A sidetrack struck a 34-metre gas column in the same
structure.
Located in water depth of 236.2
feet, both discoveries were drilled by the rig Maersk Gallant.
Further evaluation and appraisal will conclude the actual size of
the field.
ConocoPhillips controls a 22%
operating interest in the license, while partners OMV, Dong and
Talisman Energy (TLM) hold a respective 30%, 28%
and 20% stake.
Houston, Texas-based ConocoPhillips
is a major globally integrated oil company engaged in the
exploration and production of oil and natural gas, refining and
marketing of petroleum products, manufacturing of chemicals, and
other energy-related businesses.
With leading positions in both
natural gas and heavy crude oil in North America, as well as a
legacy position in the North Sea and growing exposure to lucrative
international regions, ConocoPhillips expects to replace reserves
and sustain production growth over the long term.
We appreciate ConocoPhillips’
emphasis on creating shareholder value through operational
excellence, strong project execution, dividend payout and
utilization of its excess cash flow to repurchase shares.
Furthermore, strong proceeds from asset sales, disposal of
low-profit generating properties and cancellation of potentially
less profitable projects add to the company’s drive to sustain its
growth trajectory.
Despite these positive factors, the
company’s performances are expected to be weighed down by
unpredictable global economic conditions and uncertain oil &
natural gas prices. We also remain cautious about the geopolitical
risks associated with international activates and operational
challenges.
We believe there are limited
positive catalysts for ConocoPhillips and expect it to perform in
line with the broader market. Hence, we maintain a Neutral rating
on the stock for the long term.
CONOCOPHILLIPS (COP): Free Stock Analysis Report
TALISMAN ENERGY (TLM): Free Stock Analysis Report
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