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Eni's (E) Partly-Owned Var Energi Wins 13 Licenses in NCS

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Var Energi, a company owned by Eni SpA (E - Free Report) and HitecVision, has won rights to 13 licenses in the Awards in Predefined Areas 2018 (APA) by the Ministry of Petroleum and Energy of Norway (MPE).  

Of the total licenses, Eni has received operatorship for 4 licenses — PL 985 and PL 980 in the North Sea along with PL 1025 S and PL 229 in the Barents Sea. All the licenses span across the three main oil and gas provinces in the Norwegian Continental Shelf (NCS). The other licenses wherein Eni will become a partner are PL 987, PL 988, PL 984, PL 978 and PL 977 in the North Sea as well as PL 1010, PL 1001, PL 1005 and PL 796 B in the Norwegian Sea.

These awards are in sync with Var Energi’s strategy to further reinforce its position as a major independent exploration and production company on the NCS. The new licenses will augment the company’s portfolio around operated hubs and present growth opportunities in other unexplored areas.

Eni expects oil and gas production in 2018-2021 to grow at 4% per year. Project start-ups in Angola, Egypt, Ghana, Indonesia and Kazakhstan will enable the company achieve 4% targeted output growth through 2021. Additionally, we are optimistic about the company’s exit from low-profit operations and efforts to expand international asset base.

An independent exploration and production (E&P) company, Var Energi is the largest on the NCS. In 2018, the company had an average production of more than 170,000 barrels of oil equivalent per day (boepd) with a target of 250,000 boepd by early 2020. The company operates oil and gas production across the entire shelf with fields in the Barents Sea, the Norwegian Sea and the North Sea. Eni has a share of 69.6% in Var Energi, while the remaining 30.4% is held by HitecVision.

Zacks Rank & Stocks to Consider

Eni currently carries a Zacks Rank #4 (Sell).

A few better-ranked players in the energy space are NextEra Energy Partners L.P. (NEP - Free Report) , Sunoco L.P (SUN - Free Report) and TransCanada Corporation (TRP - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Based in Juno Beach, Florida, NextEra Energy Partners was formed by NextEra Energy, Inc in 2014 to acquire, manage and own contracted clean energy projects with stable long-term cash flows. The partnership delivered average positive earnings surprise of 99.1% in the last four quarters.

Headquartered in Houston, TX, Sunoco operates as a wholesale fuel distributor. The company is expected to witness year-over-year earnings decline of 38.9% in 2018.

Calgary, Alberta-based TransCanada Corporation (TRP - Free Report) is a premier energy infrastructure provider in North America. The company generated average positive surprise of 19.1% in the trailing four quarters.

Zacks' Top 10 Stocks for 2019

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Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.

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TC Energy Corporation (TRP) - free report >>

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