ExxonMobil Corporation’s (XOM) share price rose nearly 3% following its announcement of having successfully drilled its second oil and gas well in the Vaca Muerta shale deposit in Argentina this year.
Located in Neuquen province, atop Vaca Muerta, one of the world's largest shale resources, its Invernada X-3 well is about 20 kilometers from the first drill site where non-conventional deposits were found. The well produced a flow rate of 448 barrels of oil per day and 1 million cubic feet of gas per day in the first test.
Argentina, which has the world’s second largest shale gas resource and fourth largest shale oil resource, is finding it difficult to finance the exploration of the largely unexplored Vaca Muerta deposits. Tapping these resources is likely to reverse an energy deficit of about $7 billion.
ExxonMobil, the operator of the La Invernada and Bajo del Choique blocks, holds 85% ownership. The remaining two blocks is held by Neuquen Gas and Oil, owned by Neuquen Province.
According to a 2012 survey by Ryder Scott, ExxonMobil possesses about 900,000 acres in Vaca Muerta. Other foreign energy majors like Chevron Corporation (CVX) and Royal Dutch Shell plc (RDS.A) are also involved in the development of shale fields in the region containing about 23 billion barrels of oil. With an acreage of about 30,000 square kilometres, Vaca Muerta is almost twice the size of the Eagle Ford shale formation in Texas.
Irving, TX-based ExxonMobil is the world’s largest publicly traded oil company, engaged in oil and natural gas exploration and production, petroleum products refining and marketing, chemicals manufacture, and other energy-related businesses. Approximately 83% of Exxon’s earnings come from its operations outside the U.S. The company divides its operations into three segments: Upstream, Downstream and Chemicals.
ExxonMobil carries a Zacks Rank #3 (Hold). Investors interested in the same industry could consider Spectra Energy Partners, LP (SEP) which sports a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment