Industry Trend Analysis - Quick View: Payara-2 Points To Further Frontier Development - SEPT 2017

The Latest: On July 25, ExxonMobil announced the discovery of additional oil at the Payara-2 appraisal well in the Stabroek block off the coast of Guyana. The well encountered nearly 18m of high-quality oil-bearing sandstone reservoirs, increasing the Payara discovery to approximately 500mn oil-equivalent barrels. The original Payara discovery was made in January 2017 and encountered more than 29m of high-quality resources.

Implications: The positive results at Payara-2 establish the significant potential of Guyana's largely untapped deepwater acreage, encouraging further development offshore. The well was drilled less than 20km from the prolific Liza-1 discovery which encountered nearly 90m of oil-bearing sandstone in May 2015, followed by the 25m Snoek discovery in March 2017. Payara-2 increased the gross recoverable resource estimate for the Stabroek Block from 2.0 to 2.5bn bbls of oil equivalent (boe) to between 2.25 and 2.75bn boe.

What's Next: Exxon, the operator of the joint venture (45%), has affirmed its commitment to evaluating the full potential of the Stabroek Block alongside its partners Hess (30%) and CNC (25%). The group sanctioned the first phase of Guyana's inaugural subsea production system and floating production, storage and offloading (FPSO) vessel in June 2017. Liza Phase 1 will produce up to 120,000b/d by 2020, five-years after the initial discovery.

Stabroek Taking Centre Stage
Map of Guyana and Suriname Offshore Acreage
Source: Hess

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