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Deadly Ebola virus delays Exxon (XOM) Canadian Overseas (V.XOP) exploration well

Stockhouse Editorial
0 Comments| July 23, 2014

What follows is an article that appeared in Upstream: The International Oil & Gas Newspaper.

The deadly outbreak of the Ebola virus in parts of West Africa has forced ExxonMobil Corp. (NYSE: XOM, Stock Forum) to delay drilling of an exploration well off Liberia.

Canadian Overseas Petroleum Ltd. (TSX: V.XOP, Stock Forum), the U.S. supermajor’s partner in Block LB-13, said the recent outbreak, which has killed hundreds of people in three countries, had left a shortage of expatriates available to work in Liberia.

ExxonMobil was thought to be nearing the spudding of the Mesurado-1 wildcat on the block.

Although the Canadian partner did not provide any further information on the development, a spokesman said it is still possible that drilling could happen before the end of the year.

Canadian Overseas has said in March that an oil major had taken the seadrill drillship West Tellus for a multi-well programme adjacent to Block LB-13. Seadrill’s fleet status report shows that the ultra-deepwater unit went on charter to Chevron (NYSE: CVX, Stock Forum) from January to July off Liberia at $635,000 a day.

It is not known if ExxonMobil had booked the West Tellus for the Mesurado probe.

An ExxonMobil spokesperson told Upstream: “Safety is our top priority. ExxonMobil continues to work logistics and other preparations to start drilling Block 13 offshore Liberia.”

The spokesperson would not say, however, when drilling is now set to begin, or reveal other details about the programme.

“Our Monrovia office remains open. We are supporting the Government of Liberia to raise awareness of public health precautions related to Ebola, including a grant to Plan International.’’

The U.S. giant is operator of the block on 83%, with Canadian Overseas on 17%. The former is carrying the latter for drilling at the well.

Canadian Overseas Petroleum shares eased 4.3% to 22 cents Wednesday, leaving a market cap of $76.9 million, based on 349.5 million shares outstanding. The 52-week range is 39.5 cents and 15.5 cents.

FULL DISCLOSURE: Canadian Overseas Petroleum is a Stockhouse Publishing client.

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