The Santos Limited (ASX: STO) share price is trading lower this morning despite the successful appraisal of the Corvus field confirming a significant gas resource in the Carnarvon Basin off the coast of WA.
What did Santos announce?
The 100% Santos-owned well is approximately 90 kilometres northwest of Dampier in Commonwealth waters and reached a total depth of 3,998-metres.
Results indicated that the well intersected a gross interval of 638 metres, one of the largest columns ever discovered across the North West Shelf.
The initial samples of Corvus-2 appraisal indicate a significantly higher Condensate Gas Ratio (CGR) of up to 10 barrels per million standard cubic feet (bbl/mmscf) and a similar CO2 content of 7%.
Management was upbeat on the successful appraisal noting that it was a "great start" to the company's 2019 offshore drilling campaign and highlights the value of its Quadrant acquisition.
Central Petroleum Ltd (ASX: CTP) announced that drilling commenced at the Santos-operated Dukas-1 well as it was "spudded" at 7:45am this morning.
Central is being free-carried for all costs associated with the well and Santos will continue to hold a 70% interest in the well upon completion.
Is Santos in the buy zone?
The Santos share price has climbed 32% higher since the start of the year as higher domestic gas prices and OPEC-led supply cuts have boosted most of the major oil and gas players equity gains.
Beach Energy Ltd (ASX: BPT) continues to soar higher with conflicts in Libya and Venezuela pushing Brent and WTI crude prices higher while supply-side factors indicate that east coast gas prices will remain elevated throughout 2019.
Santos' 16.6x earnings multiple is basically average within the S&P/ASX200 Index (ASX: XJO) and looks cheap compared to Beach (22.9x) and does also offer investors a 2.5% per annum dividend yield.
For those who want to look for growth outside of the Energy sector, this top-rated stock could boost portfolio gains as it continues to soar in a $22 billion industry.
