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ConocoPhillips to Boost Winter Upstream Activities in Alaska

Zacks Equity Research

ConocoPhillips COP intends to drill seven new exploratory wells in the National Petroleum Reserve in Alaska (“NPRA”), per reports. The upstream activities are expected to take place this winter. The company is anticipated to focus on drilling the resources in the rich Harpoon region, which is located southeast of its existing assets.

The company expects these planned drilling works to give it a better understanding of the nature of the large Willow prospect. The drilling works will provide more information about the geology as well as reservoir characteristics of the region. As such, the company postponed its Willow development’s date of commencement to 2025-2026. ConocoPhillips made the Willow discovery in early-2017, which is estimated to have a peak production capacity of 130,000 barrels per day.

Moreover, the company intends to gather three dimensional seismic data in the Putu prospect, located near the Nuiqsut village. These upstream activities are expected to enable it to increase reserve strength and production capabilities in the coming years. Notably, by 2018-end, ConocoPhillips’ proved oil and natural gas reserves were recorded at 5.3 billion barrels of oil equivalent. These activities will also strengthen the company’s upstream portfolio in North America. However, Alaska can experience bad weather conditions during the winter. This will likely hamper the company’s exploration and drilling plans. 

Headquartered in Houston, TX, ConocoPhillips is primarily involved in the exploration and production of oil and natural gas. In terms of proved reserves and production, it is the largest explorer and producer in the world. The company, founded in 1875, has strong presence across conventional and unconventional plays in 16 countries. Its low risk and cost-effective operations are spread across North America, Asia, Australia and Europe.

Price Performance

The company’s shares have lost 2.4% year to date compared with 14.6% decline of the industry it belongs to.

Zacks Rank & Stocks to Consider

Currently, ConocoPhillips has a Zacks Rank #3 (Hold). Some better-ranked players in the energy space are National Oilwell Varco, Inc. NOV, TC PipeLines, LP TCP and NuStar Energy L.P. NS. While National Oilwell sports a Zacks Rank #1 (Strong Buy), TC PipeLines and NuStar Energy have a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

National Oilwell’s 2019 earnings per share are expected to rise 100% year over year.

TC PipeLines beat earnings estimates thrice in the last four quarters, with an average positive surprise of 12.6%.

NuStar Energy’s third-quarter 2019 earnings per share are expected to gain more than 107% year over year.

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