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Shell to raise investment plan for Mexican ultra-deepwater field to $345M

Shell to raise investment plan for Mexican ultra-deepwater field to $345M

|About: Royal Dutch Shell plc (RDS.A)|By: , SA News Editor

Mexico’s National Hydrocarbons Commission approves Royal Dutch Shell’s (RDS.ARDS.B) request to carry out all permitted activities in its exploration plan for the ultra-deepwater Xochicalco oilfield in the Gulf of Mexico.

Shell will drill a well at depths of five miles trying to reach a Wilcox formation, with prospective reserves of as much as 562M boe, boosting its investment in the play to $345.8M from $104M in the original exploration plan, which was first approved in June 2019.

Xochicalco is located in the Perdido fold belt, an area with very little prior exploration activity and far from any existing infrastructure, which makes it technically challenging.

Shell recently was downgraded to a Sell equivalent rating at Barclays, which said the shares are expensive relative to its near-term industrial performance.

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