China's primary offshore oil company China National Offshore Oil Corp. (CEO), also known as CNOOC, made a mid-sized new discovery – Lufeng14-4 – in the Eastern South China Sea.
The Lufeng14-4 structure is located in Lufeng Sag in the Pearl River Mouth Basin of the South China Sea at an average water depth of 145 meters. The discovery well Lufeng14-4-1 was drilled and completed at a depth of 4,098 meters and encountered oil pay zones with a total thickness of approximately 150 meters. The oil production of the well tested around 1,320 barrels per day.
The successful exploration of Lufeng14-4 demonstrates the company's breakthrough in the exploration area of Paleogene System. It further proves the huge exploration potential of the Paleogene System in the Pearl River Mouth Basin.
During the third quarter, CNOOC made one discovery and drilled nine appraisal wells located off the coast of China. The company also made a deepwater gas discovery in off the coast of Gabon. Management remains optimistic on its performance, which is reflected through its premium assets portfolio, excellent execution strategy, unique position as a pure oil play and potential transactions in the merger and acquisition space.
Performance in the recently reported third quarter was muted for the company. This was evident from the quarter’s total revenue of 55.06 billion yuan (US$8.9 billion), which was down almost 4% from the year-earlier level. Out of the total revenue, approximately 90% came from oil and liquids sales, which declined 6% to 49.3 billion yuan (US$8 billion). The top line was hurt by lower oil price realizations.
CNOOC currently has a Zacks Rank #4 (Sell), implying that the stock will underperform the broader U.S. equity market over the next one to three months. Meanwhile, one could consider better-ranked players from the same industry like Atlas Pipeline Partners, L.P. (APL), Magellan Midstream Partners LP (MMP) and Regency Energy Partners LP (RGP). While Atlas Pipeline sports a Zacks Rank #1 (Strong Buy), Magellan Midstream and Regency Energy hold a Zacks Rank #2 (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