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Suncor to Purchase Stake in Rosebank Project for $50 Million
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Canada’s largest energy firm Suncor Energy Inc. (SU - Free Report) has entered into an agreement Austrian energy company, OMV AG, to purchase 30% interest in the Rosebank project from the latter.
Per the agreement, Suncor will pay an initial US$50 million to OMV for an interest in the proposed North Sea oil project. Notably, in 2016, this will be the company’s third sizable acquisition. OMV would retain a 20% stake in the project, which is currently undergoing engineering and designing. Interestingly, the company is likely to pay an additional US$165 million to OMV if the partners in the Chevron-led project agree to proceed with development.
Suncor’s deal with OMVfits its strategy of adding assets in its core operating areas and is expected to prove beneficial to it in several aspects. The beginning of 2016 saw the company complete the acquisition of Canadian Oil Sands Ltd. for C$4.2 billion. Also, Suncor purchased a 5% stake in Murphy Oil Corporation (MUR - Free Report) for US$937 million.
The Rosebank project, which is expected to produce 100,000 barrels of crude and 80 million cubic feet of natural gas per day, is situated 130 kilometers northwest of the Shetland Islands at a depth of about 1,100 meters. The aforesaid equity interest acquisition deal, which is subject to regulatory approvals and conditions, is anticipated to close in the last quarter of this year.
Calgary, Alberta-based Suncor’s operations include oil sands development and upgrade, conventional and offshore crude oil and gas production, petroleum refining, and product marketing under the Petro-Canada brand.
However, the company’s earnings and cash flows have been adversely affected by the weakness in oil prices. As a result, Suncor currently carries a Zacks Rank #3 (Hold), which implies that it will perform in line with the broader U.S. equity market over the next one to three months.
Some better-ranked stocks in the broader energy sector are Cimarex Energy Co. and North Atlantic Drilling Limited . Both these stocks sport a Zacks Rank #1 (Strong Buy).
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Suncor to Purchase Stake in Rosebank Project for $50 Million
Canada’s largest energy firm Suncor Energy Inc. (SU - Free Report) has entered into an agreement Austrian energy company, OMV AG, to purchase 30% interest in the Rosebank project from the latter.
Per the agreement, Suncor will pay an initial US$50 million to OMV for an interest in the proposed North Sea oil project. Notably, in 2016, this will be the company’s third sizable acquisition. OMV would retain a 20% stake in the project, which is currently undergoing engineering and designing. Interestingly, the company is likely to pay an additional US$165 million to OMV if the partners in the Chevron-led project agree to proceed with development.
Suncor’s deal with OMVfits its strategy of adding assets in its core operating areas and is expected to prove beneficial to it in several aspects. The beginning of 2016 saw the company complete the acquisition of Canadian Oil Sands Ltd. for C$4.2 billion. Also, Suncor purchased a 5% stake in Murphy Oil Corporation (MUR - Free Report) for US$937 million.
The Rosebank project, which is expected to produce 100,000 barrels of crude and 80 million cubic feet of natural gas per day, is situated 130 kilometers northwest of the Shetland Islands at a depth of about 1,100 meters. The aforesaid equity interest acquisition deal, which is subject to regulatory approvals and conditions, is anticipated to close in the last quarter of this year.
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Calgary, Alberta-based Suncor’s operations include oil sands development and upgrade, conventional and offshore crude oil and gas production, petroleum refining, and product marketing under the Petro-Canada brand.
However, the company’s earnings and cash flows have been adversely affected by the weakness in oil prices. As a result, Suncor currently carries a Zacks Rank #3 (Hold), which implies that it will perform in line with the broader U.S. equity market over the next one to three months.
Some better-ranked stocks in the broader energy sector are Cimarex Energy Co. and North Atlantic Drilling Limited . Both these stocks sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>