BP Begins Drilling On Carboniferous Prospect In North Sea

BP plc (LON:BP) (NYSE:BP) recently announced that it has commenced drilling on a new carboniferous prospect in southern North Sea. BP’s price chart reveals that it has moved almost at par with the Zacks sub industry Oil & Gas-International Integrated Market, year to date. While the broader market has increased by 14.5%, BP stock has gained 14.8%. The impact of the aforesaid announcement on the stock price remains to be seen.

BP believes that drilling on a potential carboniferous gas play in southern North Sea block 43/26a will unveil a new phase of development in the region, if successful.

The well being drilled by BP, along with partners Perenco and Premier, will assess the potential of a deep carboniferous age horizon several hundred meters below the mature reservoirs created by the Ravenspurn ST2 platform.

Perenco – the operator of the existing producing Ravenspurn field – will act as substitute operator for BP and the other license owners during the drilling and testing phase.

BP holds an interest of 85% in the prospect. Perenco and Premier hold 10% and 5%, respectively.

The North Sea is an important region in BP’s portfolio as it expects to maintain business in the region for the long term. In 2016, BP spent an estimated amount of about $2 billion in capital investment as well as $1.6 billion in running its operations has been spent in the region.

BP expects major new oil projects – Quad204 and Clair Ridge – to be brought online in early 2017 and 2018, respectively. Over the next 18 months, BP plans to participate in about five exploration wells along with potentially drilling about 50 developments wells in the North Sea over the next three to four years.

BP currently has a Zacks Rank #3 (Hold). Some better-ranked players in the same sector include SunCoke Energy Inc. (NYSE:SXC) , Suncor Energy, Inc. (NYSE:SU) and Futurefuel Corp. (NYSE:FF) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

SunCoke Energy posted a positive earnings surprise of 177.78% in the last reported quarter. It reported a positive earnings surprise in three of the four preceding quarters.

Suncor Energy posted a positive earnings surprise of 300.00% in the preceding quarter. It reported an average earnings surprise of 40.55% for the four preceding quarters.

Futurefuel Corp. posted a positive earnings surprise of 20.83% in the last reported quarter. It reported a positive earnings surprise in all of the four preceding quarters.

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