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Eni (E) to Dispose of Gas Distribution Business in Hungary

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Eni SpA (E - Free Report) has inked an agreement to divest 98.99% of Tigaz Zrt, a natural gas distributor in north-eastern Hungary, to MET Holding AG. The assets include Eni’s gas distribution operations in Hungary through participations in Tigaz DSO and Turulgaz.

Subsequent to a competitive tender, the agreement marks Eni’s complete exit from the gas sector in Hungary. The agreement is in line with the company’s disposals and asset rationalization plan, which commenced in 2016. The divestment began with Eni’s gas marketing activities in Hungary in free and regulated markets.

Tigaz is the owner and operator of the biggest Hungarian natural gas distributor with a network of about 33,700 kilometer and represents 48% of the national grid. It has 1.2 million delivery points in a regulated market environment.

In a separate announcement, Eni announced that it has inked a Memorandum of Understanding (MoU) with Sonatrach for forming collaboration in the renewables sector.

The MoU intends to identify the areas in which solar power production units can be constructed in Sonatrach’s productive sites. It also includes carrying out the feasibility studies in the selected sites and giving a detailed outline of the business model for the projects to be developed.

On the same occasion, the companies also evaluated the ongoing partnership, which is represented by a long-term cooperation in the hydrocarbon sector in Algeria. Sonatrach intends to strengthen ties with Eni in other sections of the oil and gas value chain that comprise the upstream, petrochemicals, R&D and marketing sectors. Therefore, it is open to all sorts of proposals.

Eni’s presence in Algeria dates back to 1981 and is the first foreign partner with permits for 38 mines. Daily equity production in the country is about 100,000 barrels.

Price Performance

Shares of Eni have gained 1.4% compared with the industry’s rally of 6% in the last three months.



 

Zacks Rank & Key Picks

Eni currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the energy sector include Holly Energy Partners, LP , SunCoke Energy Inc (SXC - Free Report) and Northern Oil and Gas Inc (NOG - 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.

Holly Energy Partners, owner and operator of refined product pipelines and terminals, delivered an average positive earnings surprise of 57.14% in the preceding quarter.

SunCoke Energy produces metallurgical coke in the United States. The company delivered an average positive earnings surprise of 113.52% in the last four quarters.

Northern Oil and Gas, based in Minnetonka, MN, is an independent energy company. The company delivered an average positive earnings surprise of 175.00% in the last four quarters.

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