World’s largest publicly traded oil companyExxonMobil Corporation (XOM) is in search of partners for a coalbed-methane project in Kalimantan, Indonesia. Coalbed methane is a form of natural gas extracted from coal beds. ExxonMobil is offering 50% of its working interest in three blocks where initial drilling results have been encouraging.
ExxonMobil holds a 49% stake in three coalbed-methane blocks –– Banjar-1, Banjar-2 and Tapin –– in East Kalimantan. The remaining 51% interest is with Indonesia’s PT Sugico Graha.
ExxonMobil has planned a two-year program for working on these wells to establish commercial viability and prepare the groundwork for full development plans.
This provides a good opportunity for companies looking for a breakthrough in a major hydrocarbon play in Indonesia. ExxonMobil’s extensive geological knowledge about this project and a well established gas business in the region will provide additional advantage.
The new phenomenon of finding other unconventional natural gas resources is fast catching up with the large international energy companies. Though they are more expensive and harder to extract, they usually have a longer lifespan than normal gas reservoirs. ConocoPhillips (COP) is only an example among many who have been exploring overseas in Western Australia and France in search of shale gas.
ExxonMobil has large and established exploration and production operations in all the major hydrocarbon producing regions of the world. Given its large base, achieving growth in oil and natural gas production has been a challenge for ExxonMobil over the past several years.
ExxonMobil has a Zacks #3 Rank, which translates into a Hold rating for a period of one to three months. We retain a Neutral rating on the stock for the longer term.
