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COP Starts Jasmine Field Production

Zacks Equity Research

ConocoPhillips (COP) has initiated production of gas from the Jasmine field in the United Kingdom, Central North Sea. With a 36.5% interest, ConocoPhillips is the operator of the Jasmine field while Eni SpA (E) and BG Group hold a 33% and 30.5% stake, respectively. The field was discovered in 2006 and is one of the largest U.K. discoveries in the past 10 years.

The Jasmine facility has a gross capacity of 140,000 barrels of oil equivalent per day (:BOED). It is expected to yield 40,000 BOED in 2014. ConocoPhillips also expects the gas field to contribute significantly to its 3% to 5% production growth rate through 2017.

Houston, Texas-based ConocoPhillips is a major global exploration and production (E&P) company with operations and activities in 30 countries that include the U.S., Canada, UK/Norway, China, Australia, offshore Timor-Leste, Indonesia, Libya, Nigeria, Algeria, Russia and Qatar.

With leading positions in both natural gas and heavy crude oil in North America, as well as a legacy position in the North Sea and growing exposure to lucrative international regions, ConocoPhillips expects to replace reserves and sustain production growth over the long term. The company’s exploration initiatives toward liquids-rich plays are gaining momentum through the Eagle Ford, Bakken and North Barnett shale plays.

Again, ConocoPhillips completed the spin-off of its refining/sales business into a separate, independent and publicly traded company, Phillips 66 (PSX) in 2012. With this, ConocoPhillips shifted its complete focus to upstream operations and thus oil and gas prices play a major role in determining its performance.

We believe that any downtrend in the global economy will affect the supply-demand fundamentals of oil and gas, hurting the sales prices for crude oil and natural gas.

We have a Zacks Rank #3 (Hold) for ConocoPhillips. However, Zacks Ranked #1 SM Energy Company (SM) is expected to outperform the market over the next few months.

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