Exxon Mobil Corporation (XOM – Free Report) has restored crude oil production offshore Guyana to the range of 80,000-90,000 barrels per day (bpd), after clearing up the technical glitch with the gas reinjection equipment. The director of Guyana’s Environmental Protection Agency, Vincent Adams, confirmed about the production resumption at the site.
Problems associated with the gas reinjection equipment, which is used to avoid excessive gas flaring, reduced production at the site by 65% to 27,500 bpd last week from early-May levels. After addressing the problem, the company is now flaring less amount of natural gas and reinjecting more, which is resulting in higher production volumes from the deepwater Stabroek block, offshore Guyana.
Two of its three gas handling systems are currently working, which is enabling it to use 85% of gas production from the reservoir. Once the third system comes online, the company is expected to reach the 120,000-bpd oil production mark.
Notably, it estimates gross resources of more than 8 billion barrels of oil equivalent from its 16 promising discoveries in the Stabroek Block. The discoveries made so far on the block have the potential to add five FPSO vessels that will be capable of yielding 750,000 barrels of oil per day by 2025. ExxonMobil commenced production in the block last December.
Esso Exploration and Production Guyana Limited, a subsidiary of ExxonMobil, is the operator in the Stabroek Block with a 45% stake. The respective subsidiaries of Hess Corporation (HES – Free Report) and CNOOC Limited (CEO – Free Report) have 30% and 25% interest in the block.
Price Performance
The company’s stock has gained 22.5% since the beginning of the second quarter compared with 8.9% rise of the industry it belongs to.
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Zacks Rank & Another Stock to Consider
Currently, ExxonMobil has a Zacks Rank #2 (Buy). Another top-ranked player in the energy space is Chaparral Energy, Inc. (CHAP – Free Report) , holding a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Chaparral Energy’s bottom line for 2020 is expected to rise 57.8% year over year.
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