Hess (HES) Discovers Oil In Stabroek Block, Offshore Guyana

Hess Corporation (NYSE:HES) announced that the sixth oil discovery — Ranger-1 exploration well — since 2015 in the Stabroek Block, offshore Guyana, was a success.

The five world class discoveries in the block — Liza, Payara, Snoek, Liza Deep and Turbot —are projected to have total recoverable resources of over 3.2 billion barrels of oil equivalent. Further, resources related with the Ranger-1 discovery will raise this estimate.

The drilling of the Ranger-1 well was started by partner ExxonMobil (NYSE:XOM) Corporation’s (XOM) associate Esso Exploration and Production Guyana Ltd. on Nov 5, 2017. It hit about 230 feet (70 meters) of high-quality, oil-bearing carbonate reservoir. The well was drilled to a total depth of 21,161 feet (6,450 meters) in water depth of 8,973 feet (2,735 meters).

The Stena Carron drillship, which is being used to drill the Ranger-1 well, will be mobilized to the Pacora prospect, 4 miles from the Payara discovery, on completion of the same. For 2018, additional exploration drilling is planned in the Stabroek Block, which is spread across 6.6 million acres (26,800 square kilometers). Potential appraisal drilling at the Ranger discovery is also planned to be executed during 2018.

ExxonMobil, the operator of Stabroek Block, holds 45%, while Hess and CNOOC Nexen Petroleum Guyana Limited hold 30% and 25%, respectively.

The discovery further validates the significant potential of Guyana. This is likely to attract other oil giants to boost financial returns and create significant value for shareholders.

Price Performance

Hess’ shares have moved up 17.6% compared with the industry’s rally of 16.2% in the last three months.

Zacks Rank & Key Picks

Hess carries a Zacks Rank #3 (Hold). A few better-ranked players in the energy sector include Statoil (OL:STL) ASA (NYSE:STO) , Pioneer Natural Resources Company (NYSE:PXD) , and Northern Oil and Gas Inc (NYSE:NOG) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Statoil, based in Norway, is a major international integrated oil and gas company. It reported an average negative earnings surprise of 8.44% in the last four quarters.

Headquartered in Irving, TX, Pioneer Natural Resources Company is an independent oil and gas exploration and production company. The company delivered an average positive earnings surprise of 67.62% in the last four quarters.

Northern Oil and Gas, based in Minnetonka, MN, is an independent energy company. The company posted an average positive earnings surprise of 175.00% during the same time frame.

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