Hess Hits Oil & Gas in the Tilapia-1 and Haimara-1 Wells

Hess CorporationHES continues to gain from holdings in some of the most prolific upstream global assets, particularly the Stabroek Block. The asset's exploration potential was ascertained again with the 11th and 12th discovery at the Tilapia-1 and Haimara-1 wells, offshore Guyana.

Post the discovery, the combined gross recoverable resources will add to earlier announced estimate of more than 5 billion barrels of oil equivalent.

Located about 3.4 miles (5.5 kilometers) west of the Longtail-1 well, Tilapia-1 encountered about 305 feet (93 meters) of superior oil-bearing sandstone reservoir. The drilling of the well commenced on Jan 7, 2019, wherein the Noble Tom Madden drillship was used to reach a total depth of 18,786 feet (5,726 meters) in 5,850 feet (1,783 meters) of water. Subsequently, the Noble Tom Madden will drill the Yellowtail-1 prospect located about 6 miles (10 kilometers) west of the Tilapia-1 well in the Turbot area. The other discoveries in the Turbot area include the Turbot, Longtail and Pluma discoveries. Acquisition of baseline 4-D seismic data is in progress.

Located about 19 miles (31 kilometers) east of the Pluma-1 well, Haimara-1 encountered about 207 feet (63 meters) of superior gas condensate bearing sandstone reservoir. The drilling of the well commenced on Jan 3, 2019, wherein the Stena Carron drillship was used to reach a total depth of 18,289 feet (5,575 meters) in 4,590 feet (1,399 meters) of water. Subsequently, the Stena Carron will return to the Longtail discovery to complete a well test. Haimara discovery is a potential new area for development.

The first oil from the Liza Phase 1 is anticipated by early 2020.The company will use the Liza Destiny FPSO vessel, whose construction is underway, to produce about 120,000 barrels of oil per day. Phase 2, which awaits the necessary approvals, is scheduled to complete all formalities by early 2019 and start by mid-2022. Phase 2 will use a second FPSO to yield about 220,000 barrels per day and is projected to start production in 2022. With the targeted sanctioning in 2019, a third development - Payara - will use an FPSO intended to produce about 180,000 barrels of oil per day as early as 2023.

Stabroek Block has acreage of 6.6 million (26,800 square kilometers). ExxonMobil Corporation XOM affiliate, Esso Exploration and Production Guyana Limited, holds 45% interest in the block as the operator. Hess holds 30% interest and CNOOC Limited CEO holds 25%.

The previous outstanding discoveries on the Stabroek Block include Liza, Payara, Liza Deep, Snoek, Turbot, Ranger, Pacora, Longtail, Hammerhead-1 and Pluma-1. The discoveries made on the block have the potential to add about five floating production, storage and offloading (FPSO) vessels that are capable of yielding more than 750,000 barrels per day by 2025.

Exxon and its partners have fortified their foothold on an ever-expanding oil field offshore Guyana. Hess is likely to benefit from availability of octane in the ever-expanding reserves offshore Guyana, which is used to produce heavier naphtha components appropriate for reforming.

Zacks Rank & Key Picks

Hess carries a Zacks Rank #3 (Hold).

Another better-ranked player in the energy space is Evergy, Inc EVRG , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Evergy, through its operating subsidiaries - Kansas City Power & Light Company (KCP&L) and Westar Energy, Inc - provides clean, safe and reliable energy in Kansas and Missouri. The company delivered average negative earnings surprise of 11.1% in the last four quarters.

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

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

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