Stabroek 13 – A Baker’s Dozen
The major’s Midas touch continued to thrill in April as Exxon announced its 13th discovery in Stabroek block, the Yellowtail-1 well. The field is estimated to hold over 5.5 billion Boep/d now. The winning exploration streak shows no signs of breaking and the company is still in the discovery process. Noble Drillship Tom Madden is expected to drill the Hammerhead-2 well, which could become the 14th discovery in the Stabroek project.
Noble Tom Madden which drilled the Yellowtail-1. (Source: Getty)
Stabroek block, with an area of 26,802 Km2 is classified as one of the most prolific offshore oil potentials in South America and is still growing in reserves.
It is a recent discovery which began with the Liza:
In May 2015, Exxon Mobil announced a significant oil discovery with the Liza-1 exploration well on the Stabroek block about 120 mi (193 km) offshore in the Guyana-Suriname basin. It encountered over 295 ft (90 m) of high-quality oil-bearing sandstone reservoirs. Transocean drillship Deepwater Champion drilled the well to an Upper Cretaceous fan play at 17,825 ft (5,433 m) in 5,719 ft (1,743 m) of water.
The operator of the block is Esso Exploration & Production Guyana Ltd., a subsidiary of Exxon Mobil which owns 45% working interest.
Its two partners are Hess Guyana Exploration Ltd., a subsidiary of Hess Corp. with 30% working interest and CNOOC Nexen Petroleum Guyana Ltd. with a 25% working interest.
Source: Exxon Mobil Feb. 2019 – Added comment by Fun Trading.
Exxon Mobil invested a small fortune in exploration CapEx since 2015 without recognizing a single dollar in production and cash flow yet.
After Hess and Exxon announced the Yellowtail-1 discovery, the field is estimated to hold over 5.5 billion barrels of oil and gas (reserve resources) , but at the pace of the new recoveries, this number will increase.
Exxon Mobil indicated in its fourth-quarter results presentation an update from 3.2 MMoep/d in resource in March 2018 to 5 MMoep/d at the end of 2018; it is now around 5.5 MMoep/d
Source: Exxon Mobil Presentation 4Q’18
The company expects to install up to 5 production platforms in the block with a total gross production of 750k Boep/d by 2025, about 337.5K Boep/d net.
Hess and Exxon are focusing primarily on the US shale (Permian and Bakken) and offshore South America (Guyana and Brazil) to drive production growth for the next several years.
On April 18, 2019:
Exxon Mobil said it made a new oil discovery offshore Guyana at the Yellowtail-1 well, marking the 13th discovery on the Stabroek Block. The discovery adds to the previously announced estimated recoverable resource of approximately 5.5 billion oil-equivalent barrels on the Stabroek Block.
This discovery comes after two discoveries offshore Guyana at the Tilapia-1 and Haimara-1 wells. Yellowtail-1 is the fifth discovery in the Turbot/Longtail area, which Exxon expects to be a major development hub. Hammerhead-2 well could be the 14th discovery in the Stabroek project. Exxon Mobil is evaluating plans to add another exploration drillship, bringing the number of drillships offshore Guyana to four.
After the Noble Tom Madden contract, Noble Don Taylor won a one-year contract with Exxon Mobil in Guyana from October 2019 until October 2020 and Bassoe’s dayrate estimate for the contract is $175,000.
Exxon Mobil discovered resources for Stabroek rose from 3.2 MM Boep/d last year to 5.5 MM Boep/d, excluding the Yellowtail-1 discovery.
Yellowtail-1 encountered approximately 292 feet (89 meters) of high-quality oil bearing sandstone reservoir and was drilled to a depth of 18,445 feet (5,622 meters) in 6,046 feet (1,843 meters) of water.
Exxon Mobil’s discovery success in 2019 thus far includes three in the Stabroek block and the massive Glaucus-1 gas discovery off of Cyprus (Exxon owns 60% of the block).
Exxon Mobil announced in February that its Glaucus-1 well intersected a 133-m gas-bearing reservoir on Block 10 southwest of Cyprus in the Eastern Mediterranean Sea. Based on preliminary interpretation of the well data, the discovery could represent an in-place gas resource of 142-227 billion cu m, the company said.
Top Conventional Discoveries in 1Q 2019
(Million barrels of oil equivalent)
| Discovery | Operator | Liquids | Gas | Total |
|---|---|---|---|---|
| Glaucus, Cyprus | Exxon Mobil | 70 | 612.0 | 682 |
| Brulpadda, South Africa | Total (NYSE:TOT) | 224 | 334.0 | 558 |
| Tilapia, Guyana | Exxon Mobil | 310 | 40.0 | 350 |
| Kali Berau Dalam, Indonesia | Repsol (OTCQX:REPYF) | 26 | 228.0 | 254 |
| Glengorm, United Kingdom | CNOOC (NYSE:CEO) | 50 | 193.0 | 243 |
| Yellowtail (added by Fun Trading) | Exxon Mobil | n/a | n/a | ~185 estimated by Fun Trading |
| Agogo, Angola | Eni (NYSE:E) | 165 | 0.0 | 165 |
| Haimara, Guyana | Exxon Mobil | 45 | 104.0 | 149 |
| Nour, Egypt | Eni | 12 | 107.0 | 119 |
| Froskelar, Norway | Aker BP (OTCPK:DETNF) | 59 | 39.0 | 98 |
| Abadan, Iran | NIOC | 61 | 11.0 | 72 |
| Cholula, Mexico | Murphy Oil (NYSE:MUR) | 36 | 28.0 | 64 |
| Orchid, Australia | PTTEP | 6 | 53.0 | 59 |
| Kokitl, Mexico | Pemex | 10 | 44.0 | 54 |
| TE-10, Morocco | Sound Energy (OTC:SNEGF) | 5 | 45.0 | 50 |
| Chaco Este, Bolivia | YPFB | 11 | 34.0 | 45 |
Source: Rystad Energy Ecube Created with Datawrapper
Stock Technical Analysis (Short-Term)
[N.B. A quotation from an on-line source as of April 22. Energy Caribbean Observer is not qualified to give market advice and the factors on which the following paragraph are based will have moved on, by the time you read this…..Ed.]
“XOM is forming an ascending wedge pattern with line resistance at $83 (Broker recommend taking about 15% profit at this level unless oil prices can continue climbing above $80 per barrel. In this case, it would be better to wait until $87 level to take profit) and line support at $81.25.
The ascending wedge pattern is close to its apex, close to a decisive breakout. This bullish situation is highly precarious and could end up with a surprising retracement depending on what OPEC+ decides after the recent move by the US for countries still buying oil from Iran, which is pushing oil prices to a five-and-a-half-month high.”
Guyana oil jackpot: 13th discovery offshore
The well found approximately 89 meters of high-quality oil-bearing sandstone reservoir and was drilled to a depth of 5,622 meters in 1,843 meters of water. It is located approximately 10 kilometers northwest of the Tilapia discovery.
ExxonMobil has contracted another drillship, Noble Don Taylor, currently in the Gulf of Mexico working for Talos Energy
Yellowtail-1 Well represents the third discovery for this year and the fifth in the Turbot area, where ExxonMobil is evaluating its potential as an additional development hub.
Exploration success shows no sign of slowing but the promise of oil revenues is driving political division.
Guyana’s Director of Energy, said the discoveries demonstrates the magnitude of Guyana’s natural resource.
He reiterated his department’s intentions to manage the resource efficiently. “For years, Guyanese have heard of the country’s oil potential and we are now seeing it manifesting….The Department of Energy intends to employ international best practice in managing this resource and the monies that will be derived there from to give Guyanese ‘the good life’ that is in consonance with the construct of the Green State Development Strategy.”
ExxonMobil continues exploration drilling activities offshore Guyana and installation operations in preparation for first oil and contracted another drillship, Noble Don Taylor. The ship, currently in the Gulf of Mexico working for Talos Energy, will be joining its sister vessels – the Noble Bob Douglas and the Noble Tom Madden – in the Stabroek Block along with the Stena Carron, bringing the drill fleet to four.
ExxonMobil intends to drill over 10 exploration and appraisal wells offshore Guyana in 2019 and 2020. The company noted the potential for at least five floating, production, storage and offloading (FPSO) vessels on the Stabroek Block producing over 750,000 barrels of oil per day by 2025.
Start-up of the Liza Phase 1 development is expected in the first quarter of 2020 and will produce up to 120,000 barrels of oil per day utilizing the Liza Destiny FPSO.
Guyana Milestone; Exxon installs first subsea tree for Liza Phase 1
The subsea tree being lowered into the water by the crane
ExxonMobil Guyana announced the installation of its first subsea tree for its Liza Phase 1 Development Project, offshore Guyana.
The tree monitors and controls the production of a subsea well and is affixed to the wellhead of a completed well. It can also manage the injection of fluids and gas into the well.
The tree arrived in Guyana on the Chouest C-Installer in February and installation and four days of testing began on April 11.
The subsea tree being installed underwater by the Remote Operated Vehicle (ROV).
The tree was lowered into the water from the back deck of the multipurpose installation vessel via a crane and was set in 1,700 meters of water onto the first completed well. It was then latched and locked in place using a Remote Operated Vehicle (ROV), after which the valves were then pressure tested.
The next tree is expected to be installed in May.
The Liza Phase 1 Development Project includes a subsea production system and a Floating Production Storage and Offloading (FPSO) vessel designed to have the capacity to process up to 120,000 barrels of oil per day from four subsea drill centres consisting of 17 wells, including eight producers, six water injectors and three gas injections.
Production startup is scheduled for early 2020.