ExxonMobil Exploration and Production Ireland (Offshore)
Limited, a unit of
), has formally informed partner Providence Resources P.l.c. the
signing of a letter of intent with offshore drilling contractor
Ocean Rig UDW Inc.
) for the ultra deepwater semisubmersible drilling rig, Eirik
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Per the terms of the Letter of Intent, the rig Eirik Raude will be
employed to spud an exploration well at Dunquin, situated in
Frontier Exploration Licence (FEL) 3/04, offshore Ireland. The rig
is expected to be operational in the first quarter of 2013 and
drilling will likely be completed in about 6 months. However, the
contract is subject to agreeable contract and corporate and
ExxonMobil Exploration and Production Ireland (Offshore) Limited,
the operator of FEL 3/04, holds an interest of 27.5%. The other
), Providence Resources and Sosina Exploration Limited hold 27.5%,
25%, 16% and 4% stakes, respectively.
The deal will augment ExxonMobil's operations as Dunquin forms a
vital part of Dublin-based Providence's ongoing Irish multi-basin,
multi-well drilling program. The company's venture with Providence
Resources - which controls most of Ireland's offshore acreage -
will allow joint development of oil fields in offshore Ireland as
well as access to the know-how for developing unreachable
resources. The deal could unlock huge oil reserves in the
unexploited offshore province of Ireland. These developments will
boost Exxon's earnings in the near future.
ExxonMobil boasts diversified operations across the world with
several new projects expected to come online through 2013. While
Exxon functions in all corners of the globe, the main areas of
focus for the coming years include the U.S., Canada, Kazakhstan,
West Africa, Australia, Russia, Angola and Iraq for new volumes. On
the exploration front, it includes unconventional natural gas
across North America as well as offshore regions, including the
Gulf of Mexico.
ExxonMobil carries a Zacks #3 Rank, which is equivalent to a Hold
rating for a period of one to three months. Longer term, we
maintain our Neutral recommendation.