Conoco to Explore Arctic in '14 - Analyst Blog
March 08 2013 - 8:20AM
Zacks
Texas-based
ConocoPhillips (COP) is set to begin drilling
around two exploration wells in remote Arctic waters in 2014.
The oil major aims to explore and drill a prospect – Devils Paw –
in the Chukchi Sea. The announcement was made by the Chukchi
program manager at the National Oceanic and Atmospheric
Administration's (NOAA) annual Arctic Open Water Meeting.
Currently, ConocoPhillips’ exploration plan is being evaluated by
the Bureau of Ocean Energy Management and additional information is
likely to be submitted by the company by mid March.
ConocoPhillips remains completely undaunted by the innumerable
hindrances faced by its rival Royal Dutch Shell
plc (RDS.A) while exploring the Arctic waters. Shell’s
drilling operations were centered on the Burger prospect, which
lies in the Chukchi, off northwestern Alaska. The drilling season
in which it started was reduced by permit issues, floating ice
obstacles and vessel disasters.
Shell also began spudding a well in the Beaufort Sea, off northern
Alaska but is very likely to stop operations in the region in 2013,
when the company intends to send its vessels to shipyard for
repairs.
Taking all these hurdles encountered by Shell into account,
ConocoPhillips proposes to employ a jackup rig, with legs that will
rest directly on the sea floor, rather than a mobile drillship like
the two utilized by Shell. The rig is being built by Noble
Corporation (NE) and will be well equipped to operate even
in extreme weather conditions.
Moreover, Devils Paw is located farther south in the Chukchi, in an
area where sea ice melts earlier in the spring and forms later in
the fall, implying a longer open-water season in most years.
With an immense potential for greater activities in the Arctic, the
first mover companies will be greatly benefited. Therefore,
ConocoPhillips is poised to benefit from these activities in the
Arctic, which will fuel its long-term production growth target.
ConocoPhillips carries a Zacks Rank #3, which is equivalent to a
short-term Hold rating. However, PostRock Energy
Corporation (PSTR) is another stock in the energy sector,
which holds a Zacks Rank #1 (Strong Buy) and is expected to perform
better.
CONOCOPHILLIPS (COP): Free Stock Analysis Report
NOBLE CORP (NE): Free Stock Analysis Report
POSTROCK ENERGY (PSTR): Free Stock Analysis Report
ROYAL DTCH SH-A (RDS.A): Free Stock Analysis Report
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