Shell Consortium Finds Oil Off Sabah - Analyst Blog


On March 17, Europe's largest oil company, Royal Dutch Shell plc ( RDS.A ), along with its joint venture partners, ConocoPhillips ( COP ) and Petroliam Nasional Berhad or Petronas, discovered oil offshore Sabah, Malaysia.

Oil was discovered from the deep water appraisal well Limbayong-2, in the Limbayong gas field, located in Block J off the coast of Sabah. During the appraisal of the gas field, Shell discovered 136 meters of oil bearing sands in the well. There are plans to continue the appraisal to determine the recoverable volume.

Shell stated that this find indicates the potential of the region. The drilling activity was carried out by the consortium in which Shell Malaysia holds a 35% stake, while ConocoPhillips and Petronas hold a respective of 35% and 30% stake.

Shell is one of the largest integrated energy firms in the world with a large and diversified portfolio of development projects that offer attractive long-term opportunities. The group has operations all over the world and is involved in various activities related to oil and natural gas, chemicals, power generation, renewable energy resources, and other energy related businesses.

Last week, Shell announced its decision to slash capital investment this year in upstream activities in the Americas. Shell is expected to lower the spending by 20% from the amount invested in 2013, as the company has been incurring losses in the North American shale resource plays. Moreover, Shell is planning to divide its downstream portfolio into distinctive performance segments and allocate capital accordingly to maximize profits.

Shell currently has a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, one can consider better-ranked players in the energy sector like Range Resources Corporation ( RRC ) and Patterson-UTI Energy Inc . ( PTEN ). Both the stocks sport a Zacks Rank #1 (Strong Buy).

CONOCOPHILLIPS (COP): Free Stock Analysis Report

PATTERSON-UTI (PTEN): Free Stock Analysis Report

ROYAL DTCH SH-A (RDS.A): Free Stock Analysis Report

RANGE RESOURCES (RRC): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: COP , PTEN , RRC , RDS.A

More from

Related Videos



Most Active by Volume

  • $16.715 ▼ 0.62%
  • $4.925 ▲ 2.39%
  • $3.335 ▼ 2.49%
  • $96.48 ▼ 0.75%
  • $98.81 ▼ 0.37%
  • $13.13 ▼ 1.28%
  • $76.191 ▼ 0.47%
  • $14.47 ▼ 0.82%
As of 10/2/2014, 12:23 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by