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Eni (E) Affiliate Wins Drilling Permit for Barents Sea Wildcat

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Eni SpA (E - Free Report) subsidiary, VårEnergi, recently won a drilling permit for a wildcat well in the Barents Sea, offshore Norway, per reports. The Norwegian Petroleum Directorate provided the permit for drilling the well 7122/6-3 S in production licence 901.

VårEnergi will likely use the Scarabeo 8 ultra-deepwater semi-submersible drilling rig at the site following the drilling of development wells in the Goliat field. The well is located 30 kilometers northeast of the famous Goliat field. The 7122/6-3 S well is going to be the first exploration well in the licence, which was awarded in February 2017.

VårEnergi, with 50% stake, is the operator in production licence 901. It has Concedo AS, Longboat Energy and Equinor ASA (EQNR - Free Report) as partners in the licence with 20%, 20% and 10% interests, respectively.

Eni’s constant efforts to expand upstream operations will go a long way in generating growth. From 2021 through 2024, it expects production to witness a compound annual growth rate of 4%. A success in the production licence 901 will strengthen Eni’s foothold offshore Norway through its subsidiary. Moreover, finding more hydrocarbon resources in the Barents Sea can enable the Italian energy giant to easily supply natural gas for the Barents Blue project.

VårEnergi and Equinor have teamed up with Horisont Energi, a Norwegian carbon tech company, to develop the Barents Blue project. The project will focus on producing ammonia using natural gas. VårEnergi and Equinor, being significant natural producers in the Barents Sea area, will likely be able to be the perfect suppliers for the Barents Blue project. The project focuses heavily on carbon capture.

Price Performance

Eni’s shares have increased 40.6% in the past year compared with 39.6% rise of the industry.

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Zacks Rank & Key Picks

The company currently has a Zacks Rank #3 (Hold). Some better-ranked stocks from the energy space include Suburban Propane Partners, L.P. (SPH - Free Report) and Chevron Corporation (CVX - Free Report) , each having a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Suburban Propane’s bottom line for 2021 is expected to rise 62.9% year over year.

The Zacks Consensus Estimate for Chevron’s earnings for 2021 is pegged at $6.74 per share, signaling a major improvement from the year-ago loss of 20 cents.

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