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ExxonMobil to Purchase 25% Stake from Eni in Area 4 Block
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ExxonMobil Corporation (XOM - Free Report) and Eni SpA (E - Free Report) recently inked a purchase and sale agreement, per which the former will purchase an indirect stake of 25% from the latter in the natural gas-rich Area 4 block, offshore Mozambique.
Currently, Eni has 50% indirect interest in the block through a 71.4% stake in Eni East Africa, which holds 70% of the Area 4 concession. Per the agreed terms, the transaction includes a cash price of about $2.8 billion.
The completion of the acquisition is subject to the fulfilment of a number of precedent conditions, including clearance from Mozambican and other regulatory authorities.
On closure of the transaction, Eni East Africa S.p.A. will be co-owned by Eni, ExxonMobil and CNPC, holding 35.7%, 35.7% and 28.6%, respectively. The remaining interests in Area 4 are held by Empresa Nacional de Hidrocarbonetos de Mozambique E.P., Kogas and Galp Energia, each holding 10%, respectively.
Eni will continue to head the Coral floating LNG project and all upstream operations in Area 4. The construction and operation of natural gas liquefaction facilities onshore, on the other hand, will be led by ExxonMobil. This operating model will ensure the use of best practices and skills of Eni and ExxonMobil as each company will be focusing on separate and clearly defined scopes alongside maintaining the advantages of a fully integrated project.
Natural gas is anticipated to be the world’s fastest growing primary source of fuel and Mozambique is well-positioned to supply LNG customers around the world. The deepwater Area 4 block is projected to hold 85 trillion cubic feet of natural gas. This is expected to deliver resources for a world-class liquefied natural gas project, in which the partners are likely to invest tens of billions of dollars, working in close collaboration with the government and local communities.
Per ExxonMobil, the asset is a major addition to the company’s global development portfolio.
Shares of the company have underperformed the Zacks categorized Oil & Gas-International Integrated industry in the last three months. During the period, Exxon Mobil shares lost 10.2%, while the broader industry registered a decrease of 5.4%.
Pioneer Natural Resources posted a positive earnings surprise of 63.33% in the preceding quarter. It had an average positive earnings surprise of 21.86% in the four trailing quarters.
Crescent Point Energy posted a positive earnings surprise of 244.44% in the preceding quarter. It beat estimates in all the four trailing quarters with an average positive earnings surprise of 127.16%.
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ExxonMobil to Purchase 25% Stake from Eni in Area 4 Block
ExxonMobil Corporation (XOM - Free Report) and Eni SpA (E - Free Report) recently inked a purchase and sale agreement, per which the former will purchase an indirect stake of 25% from the latter in the natural gas-rich Area 4 block, offshore Mozambique.
Currently, Eni has 50% indirect interest in the block through a 71.4% stake in Eni East Africa, which holds 70% of the Area 4 concession. Per the agreed terms, the transaction includes a cash price of about $2.8 billion.
The completion of the acquisition is subject to the fulfilment of a number of precedent conditions, including clearance from Mozambican and other regulatory authorities.
On closure of the transaction, Eni East Africa S.p.A. will be co-owned by Eni, ExxonMobil and CNPC, holding 35.7%, 35.7% and 28.6%, respectively. The remaining interests in Area 4 are held by Empresa Nacional de Hidrocarbonetos de Mozambique E.P., Kogas and Galp Energia, each holding 10%, respectively.
Eni will continue to head the Coral floating LNG project and all upstream operations in Area 4. The construction and operation of natural gas liquefaction facilities onshore, on the other hand, will be led by ExxonMobil. This operating model will ensure the use of best practices and skills of Eni and ExxonMobil as each company will be focusing on separate and clearly defined scopes alongside maintaining the advantages of a fully integrated project.
Natural gas is anticipated to be the world’s fastest growing primary source of fuel and Mozambique is well-positioned to supply LNG customers around the world. The deepwater Area 4 block is projected to hold 85 trillion cubic feet of natural gas. This is expected to deliver resources for a world-class liquefied natural gas project, in which the partners are likely to invest tens of billions of dollars, working in close collaboration with the government and local communities.
Per ExxonMobil, the asset is a major addition to the company’s global development portfolio.
Shares of the company have underperformed the Zacks categorized Oil & Gas-International Integrated industry in the last three months. During the period, Exxon Mobil shares lost 10.2%, while the broader industry registered a decrease of 5.4%.
ExxonMobil carries a Zacks Rank #3 (Hold). Some better-ranked players in the same space include Pioneer Natural Resources Company (PXD - Free Report) and Crescent Point Energy Corp. (CPG - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Pioneer Natural Resources posted a positive earnings surprise of 63.33% in the preceding quarter. It had an average positive earnings surprise of 21.86% in the four trailing quarters.
Crescent Point Energy posted a positive earnings surprise of 244.44% in the preceding quarter. It beat estimates in all the four trailing quarters with an average positive earnings surprise of 127.16%.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>