Integrated energy behemoth,
Royal Dutch Shell plc
) announced that it has made yet another major find in the
deepwaters of the Gulf of Mexico in the Norphlet play. This
discovery, the third in the region, was made using the Rydberg
The exploration well, drilled to a depth of 26,371 feet, is located
75 miles off the Louisiana coast. Though evaluation of well results
is still under progress, Shell estimates resource potential of
about 100 million barrels of oil equivalent (mmboe).
Shell, with its 57.2% interest, is the operator of the partnership
that made the discovery. Other parties include
) and a subsidiary of
), Nexen. Ecopetrol has 28.5% interest in the partnership while
CNOOC holds the remaining 14.3%.
Shell continues to be the leader in exploring this Jurassic-period
resource play, with over 10 years of exploration success in the
Eastern Gulf of Mexico. Moreover, Shell's management believes that
the Rydberg discovery would strengthen its leading position and
generate value for shareholders as well.
The two other major discoveries in the Norphlet play, the
Appomattox find in 2010 and Vicksburg in 2013, have an estimated
resource potential of 500 mmboe and 100 mmboe respectively. These
discoveries were carried out in a partnership between Shell and
Following the Rydberg discovery, Shell and Nexen have planed to
drill an exploratory well at Gettysburg. The drillship Noble
Globetrotter I, which drilled the Rydberg exploration well, is
being relocated for the Gettysburg well.
Shell is one of the major integrated energy firms in the world with
a large and diversified portfolio of development projects that
offer attractive long-term opportunities. The company is expected
to release second-quarter results on Jul 31 and has an
Shell currently has a Zacks Rank #3 (Hold), implying that it is
expected to perform in line with the broader U.S. market in the
next one to three months. Meanwhile, one can consider better-ranked
players from the integrated oil space like
), which has a Zacks Rank #2 (Buy).
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