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CNOOC (CEO) Starts Production From Jurassic Reservoir in GoM

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CNOOC Limited (CEO - Free Report) recently announced that a deep-water Gulf of Mexico (GoM) field has started production much earlier than expected. The Appomattox Field, located around 128kilometers southeast of Louisiana, is the first commercial discovery of Norphlet formation to come online. Production started through the Appomattox floating production system (FPS).

Notably, the project was previously slated to be operational during the second half of the year. The peak output from the field — at a water depth of around 2,255 meters — is projected at 175,000 barrels of oil equivalent per day (Boe/d). The produced oil will be transported through 145-kilometer Mattox Pipeline, which has 300,000 barrels per day capacity. The pipeline is connected to the Proteus pipeline system, which will bring the output onshore. Along with a central platform, the Appomattox project facility includes 15 subsea producing and 5 water injection wells.

CNOOC expects production from the Jurassic reservoir of Appomattox field to be a significant growth driver for its international output. Through innovation and optimization, the company achieved substantial level of cost reduction at the field. Commencement of the endeavorway ahead of the schedule marks the company’s efficiency in delivering projects. Moreover, the event also carries an optimistic message for investors in the offshore drilling market.

The company has two more projects scheduled to start production in the second half of 2019. These are Caofeidian 11-1/11-6 and Wenchang 13-2 comprehensive adjustment projects, located across Bohai, China and Western South China Sea, respectively.

Notably, CNOOC owns 21% stake in the field while operator Royal Dutch Shell plc holds 79% interest.

The CNOOC stock has gained 9.2% year to date and is expected to move further north.

Zacks Rank and Other Stocks to Consider

Currently, the stock sports a Zacks Rank #2 (Buy). Some other top-ranked players in the energy space are Apache Corporation (APA - Free Report) and Hess Corporation (HES - Free Report) . While Apache sports a Zacks Rank #1 (Strong Buy), Hess has a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.  

Apache’s earnings beat estimates in all the trailing four quarters, the average being 31.1%.

Hess’ earnings are expected to skyrocket more than 130% through 2019.

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