Exploring for new sources of oil and gas is an inherently risky and expensive venture. That’s why Chevron Corporation (NYSE:CVX) really deserves to take a bow. As the following tweet details, the company is not only really good at what it does, but last year it was also the best in the industry at discovering new sources of oil and gas:
We’re good at finding what we’re looking for. At 74%, our 2012 exploration success rate is the best in the industry. pic.twitter.com/AGExXdcMSX
— Chevron (@Chevron) Aug. 28, 2013
While a 74% exploration success rate might not sound like much, it was well above Chevron Corporation (NYSE:CVX)’s own 10-year average of 54%. Think about that for a moment. Nearly every other exploration well Chevron Corporation (NYSE:CVX) has drilled over the past decade has come up dry. Yet that’s a consistently solid success rate that many of its peers can only aspire to attain.
One area Chevron Corporation (NYSE:CVX) found a lot of success last year was in Western Australia, where it made six natural gas discoveries. Since 2009, Chevron Corporation (NYSE:CVX) has made a total of 20 discoveries in Western Australia, which are critical in supporting the three liquefied natural gas export facilities it has invested in with global partners such as Royal Dutch Shell plc (ADR) (NYSE:RDS.A) and Exxon Mobil Corporation (NYSE:XOM). So far Chevron Corporation (NYSE:CVX) has added 10 trillion cubic feet of natural gas resources through these discoveries. For perspective, that’s more natural gas than was used in electric power generation in the U.S. last year.
In the past 10 years, Chevron has added 10.2 billion barrels of oil equivalent resources thanks to exploration. What that has done is enabled the company to replace 73% of what it produced through exploration. That beat both Royal Dutch Shell plc (ADR) (NYSE:RDS.A) and Exxon Mobil Corporation (NYSE:XOM), which replaced 67% and 33%, respectively. One of the big reasons is that Chevron hasn’t been as active in acquiring companies to boost its reserves and instead has focused the capital it has invested to find new sources of oil and gas on its own.
One thing Chevron is not doing after last year’s stellar year is resting on its laurels. Already this year it has announced a major discovery in the Gulf of Mexico with partners ConocoPhillips (NYSE:COP) and Anadarko Petroleum Corporation (NYSE:APC). That discovery really demonstrates how good Chevron is at what it does. The company and its partners drilled a total of 31,866 feet, in water nearly a mile deep, to make this discovery. That’s about 6 miles down, or 106 football fields laid end-to-end.