Chinese energy giant
) has come across a big gas field in the Yinggehai basin in the
South China Sea, as reported by the chairman of its parent
company - China National Offshore Oil Company ("CNOOC").
The recoverable reserves from the basin are still under appraisal
by the state. The announcement of the new gas find follows
CNOOC's high pressure/high temperature (HP/HT) find at the
Yinggehai basin in the western South China Sea in April this
year. This marked a breakthrough for the company at the HP/HT gas
reservoir at Yinggehai, highlighting the exploration potential of
CNOOC reported that the DongFang (DF) 13-2-1 well in the
Yinggehai basin hit a 35-meter thick gas pay zones. The well
reached a depth of 3168 meters and gas was spud at a water depth
of 65 meters. In the course of the test phase, well flow rate was
recorded at 42.4 million cubic feet of natural gas per day.
The successful evaluation of the middle formation of the DF 13-1
gas field, way back in 2010, led to the current discovery.
In August 2012, CNOOC had spud gas output of over 1 million cubic
meters per day in a single well in the Dongfang 13-2, which made
it one of the largest gas discoveries offshore China. Located in
northwestern part of the South China Sea - Yinggehai basin - is
believed to be gas rich. A major part of the South China Sea,
which extends from China to Indonesia and from Vietnam to the
Philippines is assumed to hold rich oil and gas resources.
Recent successful oil discoveries - like Luda 6-2 and Lufeng 15-1
− in two different plays in China bear evidence to CNOOC's
constant efforts to upgrade its portfolio and enhance shareholder
We remain positive on CNOOC's performance, which reflects its
premium assets portfolio, excellent execution strategy, unique
position as a pure oil player and potential transactions in the
merger and acquisition space.
CNOOC Ltd., which recently inked a deal to purchase Canadian
), carries a Zacks #3 Rank (short-term Hold rating). Longer term,
we maintain our Neutral recommendation.
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