(XOM) ExxonMobil Eyes Dunquin Field in Ireland

Energy giant ExxonMobil Corporation (XOM) announced its plan to spud the massive Dunquin gas/condensate prospect by early 2013. Lying to the west of Ireland – Dunquin prospect – will be drilled by semisubmersible rig – Eirik Raude – owned by Norwegian group Ocean Rig UDW.

The rig plans to drill the Dunquin-I well during the first quarter of 2013, subject to the agreeable contract, corporate and co-venturer consent. The program is likely to extend up to six months.

Spanning across 700 square kilometers (172,974 acres), the Dunquin project comprises two major prospects – Dunquin South and Dunquin North. Both these prospects are estimated to hold gas and condensate. If the reserves are proven in these fields, Dunquin could emerge as the largest field in the world.

ExxonMobil is the operator of Dunquin and several adjacent blocks – 44/18, 44/23, 44/24, 44/29 and 44/30. ExxonMobil farmed in to the prospect in February 2006 when Providence Resources and partner Sosina, contracted ExxonMobil to carry out extensive exploration work on the prospect in return for an ownership interest of 80%. Consequently, Providence held 16% interest and Sosina 4%.

Soon thereafter, ExxonMobil gave up half of its interest to Eni SpA (E) and Repsol S.A. (REPYY). Currently, ExxonMobil, Eni and Repsol hold 27.5%, 27.5% and 25% stakes, respectively, while shares of Providence and Sosina remained the same.

Meanwhile, two other companies – Europa and Petrel that are active on the Irish Atlantic Frontier have recognized major prospects in the areas. Petrel has attained promising outcome from its technical study of its option blocks in the Porcupine Basin.

ExxonMobil aims to create targets, which in turn would draw large partners to aid an early seismic campaign followed by exploration wells. The company is fairly active in its investment program and boasts diversified operations across the world with several new projects expected to come online through 2013

ExxonMobil carries a Zacks #3 Rank, which is equivalent to a Hold rating for a period of one to three months. Longer term, we maintain our Neutral recommendation.
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