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Eni (E) Signs Energy Security Agreements With Sonatrach

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Eni SPA (E - Free Report) signed agreements with Sonatrach to speed up the reduction of emissions while enhancing Europe’s energy security.

With the agreements, Eni and Algeria-based Sonatrach will explore opportunities to reduce greenhouse gas and methane emissions, and determine energy efficiency initiatives, renewable energy developments, green hydrogen projects, and carbon capture and storage projects.

Beside this, the companies will perform research to determine possible measures to improve the country’s energy export capacity to Europe. The purpose is to support energy security and ensure a sustainable energy transition.

Algeria has been an important source of gas supplies to Europe, as the continent is concerned over reduced Russia gas supplies. The agreements would ensure Italy’s security of supply while pursuing Eni’s decarbonization goals. 

Eni has been contributing to Algeria’s growth since 1981, with an equity production of 100,000 barrels of oil equivalent per day. Eni’s recent activities in Algeria involved the divestment of a 49.9% stake in the companies managing two groups of international gas pipelines between Algeria and Italy.

The North Africa-Europe link is a crucial factor for global decarbonization to support the energy transition. As Russia cut its gas flows to Europe, Algeria emerged as Rome’s biggest supplier of gas last year. This has made the network between the two countries a strategic infrastructure for Rome’s energy security.

Eni is leading the energy transition. Eni pledged to become carbon-neutral by 2050 due to the growing urgency from investors and environmentalists to curb climate change. The leading integrated energy player is banking on rising energy production from renewable sources.

Price Performance

Shares of Eni have outperformed the industry in the past six months. The stock has gained 37.6% compared with the industry’s 22.9% growth.


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Zacks Rank & Other Key Picks

Eni currently carries a Zack Rank #2 (Buy).

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.

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 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.

Murphy USA Inc. (MUSA - Free Report) is a leading independent retailer of motor fuel and convenience merchandise in the United States. MUSA’s third-quarter 2022 earnings per share of $9.28 beat the Zacks Consensus Estimate of $7.82.

Murphy USA is expected to see an earnings surge of 80.9% in 2022. MUSA is committed to returning excess cash to its shareholders through continued share buyback programs. As part of this initiative, the fuel retailer approved a repurchase authorization of up to $1 billion, which can be completed by Dec 31, 2026.

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