Chevron Australia Pty Ltd - an affiliate of global integrated
) - announced the discovery of natural gas in Satyr-2 exploration
well in the Greater Gorgon Area, offshore Western Australia. This
marks Chevron's fifteenth find in the country since mid-2009.
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Located in the WA-374-P permit block in the Carnarvon Basin, the
well is estimated to hold approximately 128 feet of net gas pay.
The well, about 75 miles to the northwest of Barrow Island, was
drilled 3,570 feet deep into water and to a total depth of 12,454
The Australian unit of Chevron acts as the operator of the block
with 50% interest, while the remaining stake is shared equally by
Royal Dutch Shell plc
Exxon Mobil Corporation
We believe that this exploration success will boost Chevron's
growth prospects in Australia by adding to its already significant
gas interests in the country - through majority holdings in the
Gorgon and Wheatstone natural gas developments.
In particular, the drilling success of the Satyr-2 exploration well
is expected to support an expansion of the Chevron-operated
multi-billion Gorgon liquefied natural gas (LNG) project.
The Gorgon gas fields, off the coast of Western Australia, are
estimated to contain 40 trillion cubic feet of gas deposits with an
expected economic life of at least 40 years from the time of
start-up. According to Chevron, the venture will have an annual
capacity to produce 15 million tons of LNG, with the first shipment
expected in 2014.
We believe that successful drilling activities along with these
prominent projects will establish Chevron as a leader among natural
gas and LNG suppliers in the Asia-Pacific belt.
San Ramon, California-based Chevron is engaged in oil and gas
exploration and production, refining and marketing of petroleum
products, manufacturing of chemicals and other energy-related
We maintain our long-term Neutral recommendation on Chevron shares.
The shares of the company currently retain a Zacks #3 Rank
(short-term Hold rating).