ExxonMobil makes 'significant' oil find with Lancetfish-2 well offshore Guyana: ministry

Guyana's government said Oct. 26 that ExxonMobil has made a "significant" discovery of oil off the South American nation with the Lancetfish-2 appraisal well in the Stabroek block.

"The Lancetfish-2 discovery in the Liza Petroleum Production License area has unveiled an estimated 20 meters of hydrocarbon-bearing reservoir, along with approximately 81 meters of additional hydrocarbon-bearing sandstone," the Ministry of Natural Resources said in a statement.

ExxonMobil did not comment on this latest discovery, although 30% Stabroek partner Hess Corp. said the well found 125 feet of net oil pay in appraisal reservoirs and roughly 65 feet of net oil pay in a new discovery interval.

The well was drilled in 5,649 feet of water and is about 4 miles southeast of the Lancetfish-1 discovery well, Hess said in its third-quarter earnings release Oct. 25.

"The resource is still growing," Piper Sandler analyst Ryan Todd said in an Oct. 26 investor note.

More Fangtooth-area resource

Lancetfish-2 provides "more resource in the Fangtooth area," UBS analyst Josh Silverstein said. Fangtooth is a field some analysts believe could eventually be the target of a future FPSO.

The ministry said the newly discovered reservoir at Lancetfish-2 will undergo a comprehensive appraisal process, in line with the ongoing appraisal activities for other discoveries in the region.

Lancetfish-2 is the fourth offshore discovery in Guyana this year. Earlier discoveries made in 2023 include Fangtooth SE-1 and Lancetfish-1 in the Stabroek block, as well as the Wei-1 discovery in the Corentyne block.

The Stabroek partners, which also include China's CNOOC, have made about 33 significant discoveries on the block since May 2015.

Two FPSOs at Stabroek were producing about 380,000 b/d of oil combined before a mechanical issue occurred at one in the third quarter. ExxonMobil completed repairs in October that resolved the issue, Hess said.

The first two FPSOs, which produce the Liza field, should attain a combined capacity of 400,000 b/d of oil after de-bottlenecking, Hess presentation materials say.

A third FPSO that will produce the Payara field is expected online soon in fourth-quarter 2023 that adds another 220,000 b/d of oil capacity, while a fourth development, Yellowtail, with a capacity of 250,000 b/d of oil, should be online in 2025, and a fifth development, Uaru, should be online in 2026, also with 250,000 b/d of capacity.

Whiptail plans submitted

Plans for a sixth development, Whiptail, were submitted to the Guyana government this month, Hess said in its earnings release. The six FPSOs by 2027 would have gross production capacity of more than 1.2 million b/d of oil per day.

The five existing and sanctioned Guyana developments have fully loaded breakeven prices of $25/b to $35/b Brent, Hess has said.

Gross discovered resources on Stabroek currently are estimated at greater than 11 billion barrels of oil equivalent, the partners have said repeatedly, adding that they continue to see "multibillion barrels" of future exploration potential remaining.

On Oct. 23, Hess agreed to be acquired by Chevron, in a $53 billion transaction that should close in the first half of 2024. Chevron will take over Hess' 30% Guyana stake.

Chevron CEO Mike Wirth said in a call to explain the deal that Guyana was a major reason for the acquisition, which brings operating and geographical diversity to that company's global portfolio.