) has struck oil at the exploratory well on the Deepwater
Tano/Cape Three Points block offshore Ghana. This marks the
seventh successful drilling by Hess in the block.
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The exploratory well − Pecan North-1 − encountered approximately
40 feet of net oil pay in the Turonian-aged reservoir. The well
was drilled by the Stena Drillmax drillship in water depth of
7,411 feet about 7 miles northeast of the Pecan-1 well.
The U.S. explorer has already seen successful results with
respect to drilling time and cost per foot. For the last three
wells, the gross costs averaged $40 million per well, including
Ghana has enormous energy potential. British energy explorer,
Tullow Oil plc, announced the start-up of production with about
16,500 barrels of oil per day from Phase 1A of Ghana's offshore
Jubilee field in December last year.
Hess now plans to propose the appraisal for its various
discoveries to the country's government for consent on or before
Jun 2, 2013. The company has already initiated pre-development
studies on the block. Hess enjoys the operatorship of the block
with a 90% working interest. Ghana National Petroleum Corp. holds
the remaining 10% equity interest and will remain through the
production phase of the license.
Earlier this year, Hess earmarked $550 million for exploration
that targets further work on the Deepwater Tano/Cape Three Points
block off Ghana, and includes shooting seismic and drilling
exploration wells on the Dinarta and Shakrok blocks in Iraqi
This new oil find establishes Hess' hold in the emerging oil rich
region. In the recent past, the company accelerated its spending
to finance its massive exploration program, which has also
witnessed a couple of dry holes. In order to reduce its exposure
to risky areas, Hess is focusing on its new strategy of engaging
in high-impact exploration areas.
Hess retains a Zacks Rank #3 (short-term Hold rating). However,
there are other stocks in the oil and gas industry that appear
promising. These include
Range Resources Corporation
) with a Zacks Rank #1 (Strong Buy), and
Breitburn Energy Partners L.P.
) with Zacks Rank #2 (Buy).