Integrated oil and gas company, TOTAL S.A. (TOT), announced that its Bilondo Marine 2 and 3 wells have discovered oil 43.5 miles off the shores of the Republic of Congo. This discovery follows the success of the exploration wells, Moho Nord Marine 1 and 2, drilled by the company in 2007.
The Bilondo Marine wells were spud to a total depth of around 1,968.5 yards, including a water depth of 874.9 yards, in the central area of the Moho-Bilondo license. The Bilondo Marine wells 2 and 3 encountered a gross reservoir of 84.2 yards and 48.1 yards, respectively.
TOTAL operates the Moho-Bilondo license jointly with other operators. TOTAL holds the major interest of 53.5% in the license; the other operators are Chevron Overseas Congo Ltd. (31.5%) and Société Nationale des Pétroles du Congo (15%).
TOTAL, operating in this field since 2008, presently produces 90,000 barrels of oil per day, which are then sent to the onshore Djeno terminal. This new discovery will enhance TOTAL’s production capacity from this area and also give confidence for future investments here.
TOTAL’s association with the Republic of Congo dates back to 1968, with net equity production averaging 106,000 barrels per day in 2009. Significant assets of the company in Congo include the Nkossa field, where TOTAL is the 53.5% operator, the Libondo project (65% interest), and the Mer Très Profonde Sud license (40% operator).
Total is working to expand its presence in Africa and to that end, during November 2010, the company received approval from the Gabonese government to carry on exploration in the country’s sedimentary basin. Apart from Africa, the company increased its presence in Latin America by acquiring four licenses in Argentina on January 14, 2011.
The adjusted earnings of TOTAL at the end of the third quarter 2010 were $1.42 per share compared with a net loss of $1.20 per share in the year-ago comparable period. The Zacks Consensus Estimates for fourth quarter 2010, fiscal year 2010 and fiscal year 2011 currently stand at $1.52 per share, $6.29 per share and $6.91 per share, respectively.
TOTAL S.A. retains a Zacks #3 Rank (short-term Hold rating). We maintain our long-term Neutral rating on the stock. The major oil and gas peers of the company are BP PLC (BP) and Exxon Mobil Corp. (XOM)
France-based TOTAL is one of the largest publicly traded global integrated oil and gas companies based on production volumes, proved reserves, and market capitalization. The company has exploration and production operations spread across five continents.
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