Italian oil giant Eni SpA (E) has been rewarded a new exploration Production Sharing Contract (:PSC) for an area spanning 662 square kilometer close to the offshore Kitan field, in the Timor Sea.
Per the PSC, Eni is required to drill two exploration wells within the first two years and split the alternatives for the drilling of two contingent wells. Located in the Joint Petroleum Development Area (:JPDA), which is managed by both Australia and Timor-Leste, the contract area lies in an average water depth of 350 meters.
Eni has discovered numerous oil prospects in the JPDA. The company may take advantage of these discoveries together with any other oil discoveries it makes in the adjacent producing Kitan field.
The first commercial discovery in the Eni-operated Kitan field was made in 2007, while the first oil from the field was seen in Oct 2011. In 2012, the field touched a peak production rate of 45,000 barrels of oil per day.
Eni also operates the JPDA 11-106 PSC with an equity of 40.5%. The other partners in the joint venture include INPEX Offshore Timor-Leste Ltd and Timor GAP PSC 11-106 Unipessoal Limitada (TimorGap), with a stake of 35.5% and 24%, respectively.
Eni’s presence in Australia, as an operator, dates back to 2000, while in Timor-Leste and in the JPDA it has been operating since 2006 and 2007, respectively. In Australia, the Blacktip gas project is 100% owned and operated by Eni. The other non-operated projects comprise the Bayu-Undan gas and condensate fields as well as the associated liquefaction plant in Darwin.
Eni has a stake in 15 licenses for offshore exploration in Australia and Timor-Leste, of which it retains operatorship in 12 licenses.
Eni holds a Zacks Rank #3 (short-term Hold rating). However, Zacks Ranked #1 Range Resources Corporation (RRC), EPL Oil & Gas, Inc (EPL) and Stone Energy Corp (SGY) are expected to outperform the market over the next few months.
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