COP is Expanding Exploration in the Gulf of Mexico
This news may bode well for COP and it's shareholders:
Oil Production in the Gulf of Mexico Is About to Explode
By Matt DiLallo | More Articles | Save For Later
July 22, 2013
Three years ago an explosion in the Gulf of Mexico basically put a halt on oil and gas production causing many to wonder if the Gulf would ever come back. Today, a combination of high oil prices and recent major discoveries have producers scrambling to lock up additional drilling rigs to increase oil production.
What's driving demand?
Two major oil finds earlier this year in the Lower Tertiary part of the Gulf have oil producers excited; this part of the Gulf is the area that is expected to drive the demand for these additional drilling rigs. These wells are drilled more than 20,000 feet below the sea floor in water more than a mile deep. One of the partners in two of the most recent Lower Tertiary finds, ConocoPhillips (NYSE: COP ) , has quietly amassed over 2 million net acres in the deepwater Gulf. The company was recently the successful bidder on 30 additional blocks which added 172,000 net acres to its position, giving the company plenty of room to explore for additional oil. What's most interesting about this is that ConocoPhillips is a relative newcomer to the Gulf. It's well-capitalized newcomers that are a driving force behind the Gulf's reemergence.
What was once thought of as an area in decline, the Gulf is now poised to double production by the end of the decade. Investors who get in on the ground floor should do very, very well.