Replies to post #179 on The Rising Influence of Rising Affluence

[DewDiligence]

HES – Bad timing by Barclay’s analyst, Paul Cheng? Not really! Although Cheng upgraded HES a few hours before the company issued the dry-hole PR yesterday afternoon, HES was one of the few energy stocks that rose yesterday. The bad news on the Guarani well was already priced in and the stock had become too cheap.

Cheng raised his 2010 EPS forecast to $3.45:
http://finance.yahoo.com/news/Hess-upgraded-on-attractive-apf-2077673121.html?x=0&.v=1

[DewDiligence]

XOM/HES Start Exploratory Well in Brazil’s BM-S-22

This will the third well drilled on this block; the first well found a non-commercial amount of oil and the second well, called Guarani, was dry (#msg-39351839). On yesterday’s BofA webcast, John Hess said the Santos basin of Brazil remains poorly understood, but the potential upside from the BM-S-22 block is too large to ignore.]

http://www.bloomberg.com/news/2010-11-12/exxon-brazil-unit-starts-third-pre-salt-well-at-santos-basin.html

›By Peter Millard - Nov 12, 2010

Exxon Mobil Corp. and Hess Corp. began drilling a third well in deep waters off the coast of Brazil after hitting a dry hole in the same block last year.

Exxon is using Oslo-based Seadrill Ltd’s West Polaris rig to drill the Sabia well in 2,272 meters (7,454 feet) of water in the Santos Basin, Exxon spokesman Patrick McGinn said today in an e-mail. Exxon operates the block with a 40 percent stake.

The Irving, Texas-based company last year failed to find oil or natural gas at the Guarani well, after earlier finding signs of oil at a well in the same block. The two largest oil finds in the Americas in 34 years, Tupi and Libra, are located in the same so-called pre-salt area of the Santos Basin.

“It’s a very important next step to how they view, and go about developing the Brazilian deepwater,” Ted Harper, who helps manage about $6.8 billion at Frost Investment Advisors in Houston, including Exxon, said today in a telephone interview.

Exxon and Hess each hold 40 percent of block BM-S-22, while Petroleo Brasileiro SA, Brazil’s state-controlled oil company, owns the remainder.‹