CNOOC's (CEO) Weizhou 6-13 Comes Online Ahead Of Plans

CNOOC Limited (NYSE:CEO) recently reported the production start up at the Weizhou 6-13 oilfield, ahead of the schedule.

About Weizhou 6-13

The oilfield is located in the Western South China Sea's Beibu Gulf, where average water depth is around 115 feet. The project includes a wellhead platform along with other existing facilities that were used in the Weizhou 12-1 oilfield. Seven wells in the oilfield have come online as production started. Operator CNOOC is the sole owner of the field.

Why Investors Should be Excited?

By 2019, the project is expected to reach its peak crude oil output level at 9,400 barrels per day (BPD), surpassing its Overall Development Program’s estimate of around 6,300 BPD. The better-than-expected outcome from the field so far has been attributed to the company's attempts to strengthen its innovative and technological knowledge, thereby increasing efficiency. In addition, the results from Weizhou 6-13 are in line with the company’s intention of pursuing “quality growth and profitable production to drive growth and improve shareholder returns.”

With the recent project start-up, the company is on track to reach its 2018 production target of 470-480 million barrels of oil equivalent (MMBOE), of which 81% is expected to be oil.

Moreover, the company has three new projects lined up to come online this year, among which production from Dongfang 13-2 gas fields — located in the same region — is estimated to churn out 43,400 barrels of oil equivalent per day at its peak.

Price Performance

CNOOC, which is primarily engaged in the exploration, development, and production of crude oil and natural gas offshore China, and globally, has gained 32.4% in a year compared with 40.7% growth of its industry.

Zacks Rank and Other Stocks to Consider

CNOOC sports a Zacks Rank #1 (Strong Buy).

Other top-ranked stocks in the oil and energy sector include Pioneer Natural Resources Company (NYSE:PXD) , Continental Resources, Inc. (NYSE:CLR) and W&T Offshore, Inc. (NYSE:WTI) , each sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Irving, TX-based Pioneer Natural is an independent oil and gas exploration and production company. Its revenues for first-quarter 2018 are anticipated to improve 23.7% from the prior-year quarter. The company witnessed a positive average earnings surprise of 66.9% in the trailing four quarters.

Oklahoma City, OK-based Continental Resources is an oil and gas exploration and production company. Its revenues for first-quarter 2018 are expected to improve 55.2% from the year-ago quarter. For 2018, the bottom line is anticipated to be up 364.7%.

Houston, TX-based W&T Offshore is an upstream energy player. Its earnings for 2018 are anticipated to improve 3.6% year over year. The company witnessed a positive average earnings surprise of 542.8% in the trailing four quarters.

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