Chevron Oil Find In Deepwater Gulf Of Mexico - Update

(RTTNews) - Chevron Corp (CVX) on Tuesday announced a significant oil discovery at the Anchor prospect in the deepwater U.S. Gulf of Mexico and indicated appraisal drilling to begin this year.

This is Chevron's second discovery in the deepwater Gulf in less than a year and comes amid plummeting oil prices globally.

"The Anchor discovery, along with the previously announced Guadalupe discovery, are significant finds for us in the deepwater Gulf of Mexico," said Jay Johnson, senior vice president, Upstream, Chevron.

"We had one of our best years with the drill bit in 2014, reporting more than 30 discoveries worldwide and adding an estimated one billion barrels of new resources."

Chevron now has five deepwater drillships in the Gulf, two of which are focused on exploring potential sources of new oil.

Chevron subsidiary Chevron U.S.A. Inc. is the operator, with a 55 percent working interest in the Anchor prospect. Anchor co-owners are Cobalt International Energy Inc with a 20 percent percent stake, and Samson Offshore Anchor LLC and Venari Resources LLC each with a 12.5 percent stake.

The discovery comes amid a plunge in global oil prices that has put pressure on energy companies. Factors that contributed to the price decline include tepid global demand, robust domestic production, strong output in Russia and Iraq, and OPEC member Saudi Arabia's continuing to maintain production amid the glut.

The oil companies now are on to a rethink on their exploration strategy to cut costs. Per se, deepwater drilling is expensive and comes with increased regulations. Chevron and others have been making a comeback to the deepwater Gulf after the disastrous April 2010 BP oil spill.

CVX is trading at $107.75, down $0.33 or 0.31%, on a volume of 5.4 million shares on the NYSE.