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Petrobras (PBR) to Offload 50 Offshore Oil and Gas Fields

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Moving ahead with its divestment goals, Brazil's state-run energy giant Petróleo Brasileiro S.A. or Petrobras (PBR - Free Report) recently announced plans to divest onshore oil and gas fields located in Rio Grande do Norte and Bahia states. The company which is grappling with huge debt, intends to reinstate financial health through deleveraging efforts and divestment goals.

The company has initiated the divestment process by making announcements for three groups of onshore fields (totaling 50 oil and gas fields) to be sold. The three groups include Riacho da Forquilha (under which the bidders will be offered 34 oil and gas fields),Buracica (consisting of seven fields) and Miranga (comprising of nine oilfields). The total production from the 50 oilfields came at 20,400 barrels of oil equivalent per day.  The company has 100% operating interests in all but four oilfields.

Petrobras which aims to revive financial health through the divestment program of 2015-2018, has already sold assets over $13.6 billion since January 2015. The company intends to raise another $21 billion over the next two years to generate $35 billion from asset sales. Last month, it announced plans to divest around 30 assets by the end of this year. These divestment plans are in sync with the company’s strategy to reinstate investor’s faith in the stock. Further, it will also help the company gain additional liquidity as it intends to increase investment in ultra deepwater projects.

Zacks Rank and Key Picks

Headquartered in Rio de Janeiro, Petrobras is the largest Latin American oil and gas integrated company. It is involved in the exploration, production, refining, retailing and transportation of petroleum and its byproducts, both domestically and internationally. It produces most of Brazil’s crude oil as well as natural gas and accounts for almost the entire refining capacity of the country.

Petrobras has declined 13.4% of its value in the last six months compared with 6.5% loss of its industry.

However, the company delivered an average positive earnings surprise of 51.49% in the previous quarter.

Petrobras currently carries a Zacks Rank #3 (Hold).

Better-ranked players in the energy space include TransCanada Corporation (TRP - Free Report) , Lonestar Resources US Inc. and Range Resources Corporation (RRC - Free Report) . Both these companies sport a Zacks Rank #1 (Strong Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.

TransCanada delivered an average positive earnings surprise of 4.06% in the trailing four quarters.

Lonestar Resources delivered an average positive earnings surprise of 39.71% in the trailing four quarters.

Range Resources Corporation delivered an average positive earnings surprise of 51.82% in the trailing four quarters.

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