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Eni (E) Expands Footprint in Mexico with New Block Wins

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Eni SpA (E - Free Report) has been awarded three out of 10 offshore blocks by Mexico’s National Hydrocarbon Commission (CNH) in the Sureste Basin, situated in the Gulf of Mexico.

The first bids awarded under “Ronda 2” saw CNH offer blocks located in water depth ranging between 20 to 500 meters in the Sureste and Tampico-Misantla Basins. Eni Mexico will be managing all the three licenses which include Block 10, Block 7 and Block 14.

Eni will be the operator of Block 10 with a holding of 100%. The partners in Block 7 are Eni, Cairn and Citla, holding 45%, 30% and 25%, respectively. The partners of Block 14 are Eni and Citla, holding 60% and 40%, respectively. The contract awards, which consist of production sharing agreements, are subject to final approval by the authorities.

Eni’s presence in Mexico dates back to 2006. The company established its wholly-owned subsidiary Eni Mexico in 2015. The company has a 100% interest in Area 1 in the Sureste Basin. Eni is successfully conducting an exploration and appraisal campaign in the Basin. A fast-track plan for the development of the Amoca field is being finalized with an early production phase.

The new blocks are linked to Area 1 and in the case of a successful exploration campaign, will permit Eni to build up a new core area with considerable operational synergies in the country.

These awards are in line with the country’s Energy Reform and boosts. The company’s presence in a market that opened up to foreign investments in 2014, which resulted in the offering of huge growth potential.

Eni’s price chart is unimpressive. Shares of the company lost 5.3% in the last three months, while the Zacks categorized Oil & Gas – International Integrated industry registered a decline of 0.1% in the same time span.



ExxonMobil currently has a Zacks Rank #3 (Hold). Some better-ranked stocks from the same space include SunCoke Energy, Inc. (SXC - Free Report) , Enbridge Energy, L.P. and Canadian Natural Resources Limited Ltd. (CNQ - 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.

SunCoke Energy delivered a positive earnings surprise of 120% in the preceding quarter. The company beat estimates in two of the trailing four quarters with an average negative earnings surprise of 35.78%.

Enbridge Energy delivered a positive earnings surprise of 128.57% in the preceding quarter. The company beat estimates in three of the trailing four quarters with an average positive earnings surprise of 38.22%.

Canadian Natural Resources delivered a positive earnings surprise of 30.77% in the preceding quarter. It surpassed estimates in two of the trailing four quarters with an average negative earnings surprise of 275.46%.

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