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Eni (E) Makes Gas Discovery at Nargis-1 Well Offshore Egypt

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Eni SPA (E - Free Report) made a natural gas discovery at the Nargis-1 exploration well in the Eastern Mediterranean Sea off Egypt’s coast.

The Nargis-1 well is part of Egypt’s Nargis Offshore Area concession, which covers about 445,000 acres. Eni holds a 45% interest in the concession.

The Nargis-1 well, which was drilled in 309 meters of water using the Stena Forth drillship, encountered 61 meters of Miocene and Oligocene gas-bearing sandstones. The discovery is intended to be developed by utilizing Eni’s existing facilities.

The well’s reserves were being evaluated and the concession partners are working to commence production as soon as possible. The discovery will uphold the company’s recent award of new blocks in Egypt.

Eni is seeking new gas sources as it aims to replace gas imports from Russia by 2025 after the global fallout from Russia’s aggressive invasion of Ukraine. As part of Eni’s successful drive to increase the supply of gas to Europe, the latest gas find has the potential to uncover further possibilities in the region.

Eni has been contributing to Egypt’s growth since 1954. The company is currently the country’s leading oil and gas producer, with an equity production of hydrocarbons of 350,000 barrels of oil equivalent per day.

Egypt has become a natural gas hot spot after the company’s discovery of the super-giant Zohr gas field in the country in 2015. Eni produces about 60% of the country’s gas production and operates the Damietta LNG export facility.

Eni aims to achieve net-zero emissions by 2050. The company is involved in initiatives meant for decarbonizing the Egypt energy sector, which includes the development of carbon capture and storage facilities, renewable energy plants, and agro feedstock for bio-refining.

Price Performance

Shares of Eni have outperformed the industry in the past six months. The stock has gained 41.4% compared with the industry’s 27.9% growth.


Zacks Investment Research
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Zacks Rank & Key Picks

Eni currently carries a Zack Rank #3 (Hold).

Investors interested in the energy sector might look at the following companies that presently flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

DCP Midstream, LP (DCP - Free Report) is a leading energy infrastructure firm. DCP’s third-quarter adjusted earnings of $1.50 per unit beat the Zacks Consensus Estimate of $1.05.

DCP Midstream is expected to see an earnings surge of 181% in 2022. For the nine months ended Sept 30, 2022, DCP generated $553 million of excess free cash flow, up 46% year over year. The high level of excess free cash flow reflects the firm’s tremendous strength in operations.

Transocean, Inc. (RIG - Free Report) is the world’s largest offshore drilling contractor and leading provider of drilling management services. RIG reported an adjusted net loss of 6 cents per share in the third quarter of 2022, narrower than the Zacks Consensus Estimate of a loss of 15 cents.

Transocean is expected to see earnings growth of 25.7% in 2022. Despite the struggles with the coronavirus-induced price and demand slump, Transocean's backlog of $7.3 billion reflects steady demand from the customers, and offers earnings and cash flow visibility.

ProPetro Holding Corp. (PUMP - Free Report) is an oilfield service provider operating primarily in the Permian Basin over west Texas and New Mexico. PUMP is expected to see an earnings rise of 164.2% in 2022.

As of Sept 30, ProPetro had $43.2 million in cash and cash equivalents, and total liquidity of $155 million. ProPetro’s balance sheet is debt-free, which provides a potential lifeline amid the difficult operating environment. The steep cutbacks to its capital budget further strengthen its financial position.

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