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Untitled Document

Nexen, Endeavour encounter natural gas, oil in North Sea

Rochelle discovery could hold 10-15MMboe net to Endeavour

Endeavour International Corp. (NYSE Amex: END) and Nexen Inc. (NYSE: NXY) have made a natural gas and oil discovery in the West Rochelle area of the North Sea.

The West Rochelle well was spudded on September 3, and reached a total depth of 10,787 feet on October 7, encountering natural gas with an oil rim in an excellent quality reservoir similar to that discovered at Rochelle.

The well, located on Block 15/26b, was drilled using semisub Transocean Prospect, a semi-submersible drilling unit capable of operating in harsh environments and water depths up to 457 meters (1,500 feet) and a max drill depth of 7,620 meters (25,000 ft). The well is currently being sidetracked to the north in order to further appraise the extent of reservoir.

The Greater Rochelle area is comprised of three blocks in the North Sea - 15/26b, 15/26c and 15/27. Endeavour holds a 55.6% interest and is the operator in block 15/27 with its partner Nexen Petroleum UK Ltd. and has a 50% working interest and operatorship of 15/26c. Nexen and Premier Oil plc have each farmed into block 15/26c for 25% working interest. 

Nexen saw its numbers surge for the third quarter, reporting Q310 earnings per share of US$1.02, compared to 23 cents in the same quarter last year. Revenue for the quarter was US$1.43 billion, which compares to the estimate of $1.41 billion.

The discovery could be up to 30 MMboe and 10-15 MMboe net to Endeavour, according to a research note by Global Hunter Securities dated October 28. “This is significant given they 1) don’t have any money in it and 2) are building the infrastructure for Rochelle so no new infrastructure is needed,” noted Global Hunter. 

Shares of Endeavour International were up +0.0900 (+7.031%) at US$1.370 mid-day Thursday after the announcement. 

Source:  Endeavour International, Global Hunter Securities

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