Chinese energy company CNOOC Limited (CEO) has struck a new oil discovery − Luda (LD) 21-2 − in the country’s south Liaodong Bay in Bohai.
Located in the inverted structure belt of LD 22-27 in south Liaodong Bay, the LD 21-2-1D well has unearthed oil pay zones with total thickness of 170 meters at a depth of 2,831 meters under water and approximately 20 meters adjoining the producing LD 27-2 oilfield.
CNOOC confirmed that the well has generated around 608 barrels of oil per day on trial. Management also affirmed that this new find holds high quality hydrocarbon and represents the thickest oil layers found in the exploration of Bohai clastic rocks in recent years. Hence, with impressive economics in exploration and development, the discovery has a good exploration prospect.
CNOOC Ltd is one of the three leading oil companies in China and one of the largest independent oil and gas exploration and production companies of the world. It is China’s dominant producer of offshore crude oil and natural gas and is engaged in the exploration, development, production, and sale of crude oil, natural gas, and other petroleum products.
The company registered weak production volume in the first quarter, declining approximately 6.6% from the year-ago level mainly due to the overhaul of Penglai 19-3 oilfield production at Bohai. But we remain optimistic on the company’s premium assets portfolio, excellent execution strategy, unique position as a pure oil player and potential transactions in the merger and acquisition space.
CNOOC also believes that it will be able to maintain a compound annual production growth rate of 6–10% from 2011 to 2015 on the back of various organic and inorganic ventures.
We maintain our long-term Neutral rating on CNOOC ADRs. The company, which competes with China Petroleum & Chemical Corp. (SNP) currently holds a Zacks #3 Rank, equivalent to a short-term Hold rating.
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