Exxon Mobil Stock Rose After It Announced a Fifth Oil Production Project in Guyana and Considered Other Areas

Exxon Mobil Stock

Exxon Mobil Stock (NYSE:XOM)

Alistair Routledge, head of the company’s Guyana operations, stated in an interview with Reuters on Monday that Exxon Mobil (NYSE:XOM) has confirmed it is preparing to approve its fifth oil production project in Guyana and may take additional exploration acreage. Routledge was speaking about the company’s activities in Guyana.

The proposed fifth development would be located in the Uaru oilfield. At its peak, it would produce approximately 250 thousand barrels per day. It would be the largest and most expensive project undertaken by the Exxon-led consortium, surpassing the fourth project’s ten billion dollar price tag.

According to an estimate prepared for Guyana’s Environmental Protection Agency, the development will cost approximately $12.7 billion. This is approximately 27% more than Exxon’s (NYSE:XOM) fourth development cost. It is anticipated that the first oil will flow in 2027 and that production will continue for 20 years.

Exxon (NYSE:XOM) has presented a development plan for the oilfield. An initial construction contract was given to Japan’s Modec Inc. last autumn. Routledge said that the consortium might authorize expenditure on the project as early as April if the proposal is accepted by the government of Guyana.

Although “it would be premature to say yes or no” to participation before the country releases the full terms of new production contracts, Exxon (NYSE:XOM) will consider submitting bids when Guyana holds its first competitive auction for new exploration areas in April. The auction will be held for new exploration areas.

David Alton Clark says in a study published on Seeking Alpha that Wall Street has widespread optimistic sentiment about Exxon Mobil (NYSE:XOM). Still, the company has “nowhere to go but down.”

Featured Image: Unsplash @ justinphoto

Please See Disclaimer

About the author: I'm a financial journalist with more than 1.5 years of experience. I have worked for different financial companies and covered stocks listed on ASX, NYSE, NASDAQ, etc. I have a degree in marketing from Bahria University Islamabad Campus (BUIC), Pakistan.