BP Encounters Oil in the Far South Prospect, Gulf of America

BP plc BP, the British oil and gas major, announced that it has made a new oil discovery in the Gulf of America. The new oil discovery was made at the Far South prospect, where an exploration well was drilled at a total depth of 23,830 feet. The Far South field in the Gulf of America is situated in the western Green Canyon, approximately 193.12 kilometers off Louisiana’s coast. The water depth at the site is approximately 4,092 feet.

The Far South well is jointly owned by BP, which holds a 57.5% stake, and the U.S. energy giant Chevron Corporation CVX, with a 42.4% working interest. The Far South field, operated by BP with CVX as its partner, is situated toward the north of the Constellation field, approximately 4 miles away. The British energy giant drilled the exploratory well in Green Canyon Block 584.

The company drilled an exploratory well and another sidetrack well, both of which yielded promising results. Both wells have confirmed the presence of oil in high-quality Miocene rock formations. The preliminary data collected during exploration suggest that the hydrocarbon reservoirs have the potential for commercial exploitation.

In February 2025, BP announced a strategic reset, which entailed cutting down on its renewable investments and focusing on building its upstream portfolio. This move is aimed at improving the energy firm’s profitability and enhancing shareholder returns. The new hydrocarbon discovery in the Gulf of America aligns with BP’sgoal of expanding its upstream portfolio and increasing its spending on exploration and production activities.

BP mentioned that its Gulf of America assets correspond to a significant part of its business, and the discovery underscores the region’s growth potential. The company plans to expand its capacity in the region to more than 400,000 barrels of oil equivalent (boe) per day. The Gulf of America presents a significant opportunity for growing BP’s upstream asset base. BP’s production target for 2030 involves growing its oil and gas production to approximately 2.3-2.5 million boe per day. Additionally, the company expects to increase its capacity further until 2035.

Zacks Rank and Key Picks

Both BP and CVX currently carry a Zacks Rank #3 (Hold).

Some better-ranked stocks from the energy sector are Archrock Inc. AROC and Kinder Morgan, Inc. KMI. While Archrock currently sports a Zacks Rank #1 (Strong Buy), Kinder Morgan carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Archrock is an energy infrastructure company based in the United States with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues. With natural gas playing an increasingly important role in the energy transition journey, AROC is expected to witness sustained demand for its services.

Kinder Morgan is a leading North American midstream player with a stable and resilient business model, largely driven by take-or-pay contracts. KMI’s stable business model shields it from commodity price volatility, resulting in predictable earnings and facilitating reliable capital returns to its shareholders.

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This article originally published on Zacks Investment Research (zacks.com).

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