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Eni (E) Boosts Presence in Vietnam With New Acquisition

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Eni S.p.A. (E - Free Report) recently announced the acquisition of full participating interest and operatorship of Block 115/09 in offshore Vietnam. The Italian energy major acquired the interests from a subsidiary of upstream oil and gas company, KrisEnergy Ltd.

The block is located in the famous Song Hong basin, close to the major Ken Bau gas and condensates discovery. Last July, Eni stated the Ken Bau discovery had preliminary estimates of 7-9 trillion cubic feet of gas and 400-500 million barrels of associated condensate. Proximity to the Block 114 discovery and Block 116 can make the latest acquisition a game changer. The financial terms of the deal are yet to be disclosed.

The water depth of the recently acquired block ranges within 90-1,000 meters. It is spread across 7,382 square kilometers. The company already has operating stakes in five blocks in Song Hong and PhuKhanh basins, located offshore central Vietnam. The move is in line with Eni’s strategy of ramping up the natural gas portfolio in Asian Far East. Notably, it has been operational in Vietnam since 2013.

The company is strengthening the upstream portfolio, which incorporates assets from different parts of the world like Vietnam, Algeria, Mexico, Egypt, Norway, Angola and others. Its new light crude discovery in Block 15/06, offshore Angola, is estimated to have a reserve of 200-250 million barrels of oil. Eni’s exploration campaign offshore Angola, which led to multiple major discoveries, will significantly boost cash flows.

Price Performance

Eni’s shares have increased 54.4% in the past six months compared with 47.4% rise of the industry.

Zacks Rank and Other Stocks to Consider

Currently, the stock holds a Zacks Rank #2 (Buy). Other top-ranked players in the energy space include CrossAmericaPartners LP (CAPL - Free Report) , Hess Corporation (HES - Free Report) and Equinor ASA (EQNR - Free Report) , each having a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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