Exxon reveals yet more success offshore Guyana

  • Jun 11, 2021
  • Proactive Investors

Exxon Mobil Corporation (NYSE:XOM) revealed yet more impressive exploration results at the Stabroek Block offshore Guyana with its latest discovery well, Longtail-3, measuring some 70 metres of net oil pay.

Oil was notably seen at a lower depth than the previously drilled nearby Longtail-1 well, located some 2 kilometres away.

At the same time another well, the Mako-2 evaluation well, has confirmed the quality, thickness and areal extent of reservoir – which leads the US oiler to potentially add a fifth floating production facility to the ongoing Liza Complex field development.

A third well, the Koebi-1 exploration well, also found oil but in non-commercial volumes.

Exxon presently has six drillships operating offshore Guyana which is potentially one of the last major oil frontiers, as large-scale multinational oil firms move increasingly towards ‘energy transition’ and an eventual curtailment of new oil exploration projects.

Projects like Liza however present an attractive opportunity for high-yield production from a comparatively small operating footprint, given how prolific the exploration programmes have proven and the production volumes seen to date.

Exxon unearthed Liza, its first discovery at Stabroek, back in 2015 and the development has been fast-tracked as consecutive exploration programmes yielded consistent success.

More than 8bn barrels of crude resources have so far been found at Stabroek (with the Liza, Payara, Liza deep, Snoek, Turbot, Ranger, Pacora, Longtail, Hammerhead, Pluma, Tilapia, Haimara, Yellowtail, Tripletail and Mako discoveries).

Phase 1 of the Liza development came online in 2020 with the Liza Destiny floating production, storage and offloading (FPSO) vessel designed to handle some 120,000 barrels of oil per day, whilst storing up to 1.6mln barrels of crude. The first phase comprises a total of eight production wells, plus water and gas reinjection wells.

Phase 2 will see the addition of the Liza Unity FPSO to handle another 220,000 bopd from 15 further production wells.

Such stats give some context to the eventual scale of the operation at Stabroek, given that the latest exploration results support a development case for up to five FPSOs.

London-listed small-cap Westmount Energy Limited (LON:WTE, OTCQB:WMELF) saw its shares rise earlier this week as drilling resumed at the Jabillo-1 exploration well, in the Canje Block, offshore Guyana.

Canje is adjacent and contiguous to Stabroek, immediately north of the Liza Complex discoveries.

Westmount has a shareholding in JHI Associates which is a minority partner in Exxon operated Canje.

Jabillo-1 is seen as a 1bn barrel prospect and it is the second of three exploration wells scheduled for at Canje in 2021.