Royal Dutch Shell Plc
) along with its Canada based partner
) have encountered additional resources in the Appomattox deepwater
structure in the Gulf of Mexico. The companies were conducting
extensive exploration and appraisal activities on the
Nexen confirmed that the drilling on the northeast fault block
of Appomattox indicated the presence of contingent recoverable
resources of about 215 million barrels of oil equivalent (boe).
The Appomattox structure in the Mississippi Canyon can be
divided into three large fault blocks. The south fault block -
discovered in early 2010 - is estimated to hold about 65 million
boe of probable reserves. This newly discovered resource will be
tagged to these probable reserves.
The companies also made a promising discovery at Vicksburg,
about six miles to the east of Appomattox.
Shell acts as the operator of Appomattox with an 80% interest,
while the remaining stake is controlled by Nexen. In block
Vicksburg, Shell has a 75% interest and Nexen holds a 25%
Both the companies - Shell and Nexen - aim to carry on further
exploration and evaluation activities in the offshore field during
2012 and 2013. They also plan to drill a well in the region between
Appomattox and Vicksburg to further explore and evaluate the
We believe that this discovery forms an important milestone in
the Gulf of Mexico operations that is expected to open doors for
further activities by other companies.
Headquartered in Netherlands, Shell owns one of the largest
integrated oil and gas businesses in the world and is involved in
various activities related to oil and natural gas, chemicals, power
generation, renewable energy resources and other energy-related
On the other hand, Calgary, Alberta-based Nexen is a major oil
and gas company with exploration and production operations in
Canada, the U.S. Gulf of Mexico (GoM), North Sea (U.K.), Yemen,
Nigeria and other areas.
We are maintaining our long-term Neutral recommendation on both
Shell and Nexen. Both the companies currently retain a Zacks #3
Rank, which translates into a short-term Hold rating.
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