On Wednesday the oil and gas giant won an early round in its slug fest with regulators over whether it conspired to cover up what it knew about climate change when the U.S. Virgin Islands attorney general agreed to drop a subpoena for company records. Massachusetts, New York and California are also pursuing direct inquiries into Exxon, but it was an early victory nonetheless.
The bigger news came today, when Exxon Mobil confirmed reports earlier in the week that the second well on its Liza structure in the Stabroek block off the coast of Guyana has confirmed a big oil discovery of 800 million to 1.4 billion barrels of oil equivalent, versus original estimates of 700 million.
"This exploration success demonstrates the strength of our long-term investment approach as well as our technology leadership in ultra deepwater environments," Steve Greenlee, president of Exxon Mobil Exploration Co., said in the statement.
Jefferies LLC analyst Jason Gammel said it's very early to begin assessing the value of the find, but using pre-development analogs of Jubilee in Ghana and Zaedyus in French Guiana as models, the resource could have a value of $9.9 billion, making Exxon's 45% of the block worth $4.5 billion or $1.07 per share. "[The discovery has] meaningful value, even for Exxon," he said.
Other companies will benefit as well if the discovery's potential is realized. Hess (HES) - Get Report owns 30% of the block - which would boost its proved reserves by almost 40% at the top of the resource estimate -- while Cnooc's Nexen owns 25%.
Hess CEO John Hess said in his own statement that his company is encouraged by the drilling results of the prospect, "which we believe has the potential to materially contribute to our resource base and future production growth."
Guy Baber, an analyst at Piper Jaffray's Simmons & Co. International, was cautiously cheerful about the news, saying that the discovery "is a positive differentiating factor for HES relative to peers."
Exxon Mobil's stock was up 1.3% on the news to $93.68 per share while Hess' rose 3.6% to $59.90.
Britain's Tullow Oil plc and Spain's Repsol have also been drilling off the coast of the South American country but haven't announced any big finds yet.
Guyana doesn't produce any oil and gas right now and would clearly benefit from a new revenue source. It's one of the poorest countries in the Western Hemisphere with a gross domestic product of only $3 billion, or $4,000 per capita, and its economic prospects were trending flat to down before the announcement of the find.
The discovery would also do wonders for Exxon Mobil's exploration failure rate, which reached 39% in 2014, up from 33% in 2013.
Exxon Mobil also made headlines this week saying it would actively advocate for a climate tax, joining Royal Dutch Shell and BP, which have been doing the same. So on the whole, not a bad week for an oil company a lot of folks seem to love to hate.