Chevron’s (CVX) affiliate Cabinda Gulf Oil Company Limited (CABGOC) and the latter’s partners have made a successful discovery in Block 0. The 79-3XST1 discovery well is located in the Cabinda coastline in Angola.
 
Through CABGOC, Chevron has a 39.2% interest in the find. Chevron is the operator of the Block 0 contractor group, which also includes SONANGOL E.P. (41%), Total E&P (10%) and ENI Angola Production B.V. (9.8%).
 
The 79-3XST1 well was drilled in March 2009 to a vertical depth of 13,000 feet. The well was tested from a single 150 feet perforated interval and flowed at a rate of 11.6 million cubic feet of natural gas and 2,550 barrels of liquid hydrocarbons per day.
 
Chevron has also made a number of promising discoveries over the last two years in the deepwater Gulf of Mexico (GoM), offshore Australia and West Africa that provide it with an attractive inventory of developmental projects.
 
Chevron’s current oil and gas development project pipeline is among the best in the industry. The company is projected to add more than 1 million barrels of oil equivalent per day by 2011. Chevron’s major ongoing projects are located in Kazakhstan, West Africa, Australia and the deepwater GoM regions. Most of these projects are expected to come on stream in the next few years.
 
Our continued favorable view of Chevron shares reflects the company’s attractive inventory of development opportunities and recent exploration successes that put it in an advantageous position relative to its opportunity-poor peers. We believe that the company is capable of generating above peer group average production and reserve growth in the next few years. Therefore, we maintain our Outperform rating.
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