Exxon Mobil Seems To Be Hiding The Size Of Guyana's Gas, Cash Flow Could Exceed Expectations

https://seekingalpha.com/artic...-exceed-expectations

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Growth, long-term horizon, Deep Value, momentum
MARKETPLACE
The Energy Forum
Summary

Exxon Mobil has not released any gas discovery figures for the Stabroek block of Guyana despite FPSOs indicating future gas production.

Using a comparison with other blocks, along with the FPSO specifications, cash flow could be a minimum of 10% higher on Liza Phase 1 and increase thereafter.

There are a number of reasons the company could be doing this including negotiations with the Guyanese government.

This could be an exciting development, I recommend investors pay close attention.

 

Exxon Mobil (NYSE: XOM) is a major oil producer, the second-largest publicly traded one in the world after the now public Saudi Aramco (ARMCO). As one of the largest producers, the world takes notice when the company succeeds, as it has recently in offshore Guyana. Here, the company arrived in an area where no one had previously found significant oil and found what is currently estimated at more than 6 billion barrels of oil.

This is despite the company only investigating a small portion of its potential plays here. I recommend reading more about the company’s Guyana assets in my previous article here. The point of this article is to discuss a recent article Kaieteur News Online has published, discussing how Exxon Mobil seems to be hiding the size of its Guyana gas finds and what that could mean for the company and investors.

Exxon Mobil Statements

To start our analysis of Exxon Mobil’s Guyana gas, let’s take a look at what the company has had to say about it. To date, Exxon Mobil has said nothing about gas discoveries in the Guyana fields besides the fact that it’s part of the company’s oil and gas exploration program in the region.

However, the company has stated, “it has informed the Inter-American Development Bank (IDB) that between 30 to 50 million cubic feet per day of Natural Gas (NG) can be made available for electricity generation in Guyana.” That’s not much. At current market rates in the United States, it’s about $90 thousand/day at the midpoint or almost $40 million/year.

 However, given that Guyana is a nation of three-quarters of a million people, the question becomes, is the company, which hasn’t discussed any gas discoveries, not finding any gas and avoiding the topic, or finding major gas but only sharing the minimum information possible - i.e., that we have enough gas to generate electricity for your current small population.

As we’ll see, I expect it’s the latter.

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