(1 7870 HUF, -1,27%) said yesterday that INA has made a new oil discovery at the exploratory well Đeletovci-1 Zapad within the Privlaka field, near Vinkovci, Croatia. The latest tests show oil production of roughly 600bbl/d. However, a more precise evaluation of the hydrocarbons reserve base and production will be determined by further tests and field development.
With production of around 600bb/d, or 0.5% of MOL’s total hydrocarbon production, this well itself does not have a significant valuation impact. However, any contribution that can (at least) slow down the alarming decline rates of MOL’s highest margin barrels should be viewed positively. Since 2Q10, MOL’s hydrocarbon production in its heartland (Hungary and Croatia) has dropped a whopping 18%. Although this contraction was driven primarily by the rapid decline of natgas production, crude oil production was