ConocoPhillips (COP) and its Australian partner Karoon Gas have been jointly conducting a drilling program on the Kronos-1 exploration well in the Browse Basin off the coast of Australia. Kronos-1 is located in the Poseidon gas field. ConocoPhillips serves as the operator in Poseidon with a 60% interest; Karoon holds the remaining 40% interest.
Though the flow rate has been constrained by equipment configuration, the maximum flow attained was 26 million standard cubic feet per day (MMscf/d). The well data will be analyzed in the coming months, which will determine future plans.
Conoco continues to gain momentum with high potential drilling programs. Besides the Eagle Ford and Muskwa Shale (in British Columbia, Canada) drilling programs, the company’s two Gulf of Mexico Lower Tertiary discoveries have the potential to add significant numbers to its reserves base.
The company has added a number of high impact projects in the LNG area and achieved exploration successes in several international locations including offshore China, Vietnam and Gulf of Mexico regions.
ConocoPhillips’ creation of an Australasian natural gas business with Origin Energy, a leading Australian integrated energy company, should cement its competitive position in the rapidly growing LNG market.
While Conoco will sell approximately $10 billion of assets in 2010 and 2011, the company anticipates per share production growth of 3% in both 2010 and 2011 on the back of its drilling initiatives. We are currently Neutral on the company.
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