Independent exploration and production (E&P) company,
Canadian Natural Resources Ltd.
), announced that it has partnered with Total E&P South
Africa BV, a unit of the integrated oil and gas company
). The partnership plans to explore a block in the Outeniqua
Basin, offshore South Africa.
A subsidiary of Canadian Natural, CNR International Limited has
entered into a farm-out agreement with Total. Per the agreement,
the farmee (Total) has received 50% working interest in the Block
11B/12B and operating rights.
In exchange, the farmor (Canadian Natural) received an upfront
cash payment. Apart from that it also recovered half of the
earlier incurred costs and a carry in the first exploration well
drilled up to a gross cost of $150 million. The joint venture
will decide the location of the first well to be drilled. The
company may receive additional payment if the prospect shows
potential for multi-well exploration and development programs in
Spread across 19,000 square kilometers, the block is located
about 175 kilometers off the southern coast of South Africa. The
area is located in water depth of 200 to 1,800 meters.
Management believes that the South African prospect holds
substantial potential, and the association with Total is looked
upon as a positive.
Canadian Natural is engaged in the acquisition, development and
exploitation of crude oil and natural gas properties. It is one
of the largest independent E&P companies in Canada, with
extensive heavy crude oil and natural gas developments.
Calgary, Alberta-based Canadian Natural currently holds a Zacks
Rank #2 (Buy), implying that it is expected to perform better
than the broader U.S. equity market over the next one to three
Apart from Canadian Natural, one can also consider other stocks
in the E&P industry such as
Stone Energy Corp.
Matador Resources Co.
) as attractive investment opportunities. Both these stocks sport
a Zacks Rank #1 (Strong Buy).
CDN NTRL RSRCS (CNQ): Free Stock Analysis
MATADOR RESOURC (MTDR): Free Stock Analysis
TOTAL FINA SA (TOT): Free Stock Analysis
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