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Equinor (EQNR) Begins Production at Brazil's Mendubim Plant
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Equinor ASA (EQNR - Free Report) announced the commencement of power production at its Mendubim solar plant in Brazil.
The new facility, with a capacity of 531 megawatts (MW), represents a significant expansion in the company’s renewable energy operations, boosting its production in the South American nation by 30%.
Mendubim is set to produce 1.2 terawatt hours (TWh) of electricity annually. A notable portion of this production, about 60%, is secured through a power purchase agreement with Norsk Hydro’s Alunorte, which ranks as one of the largest alumina refineries globally. The remaining electricity generated will be offered in Brazil’s power market, contributing to the nation’s energy mix.
The project is a collaborative effort, with Equinor, Scatec and Hydro Rein — a renewable energy unit of Norsk Hydro, jointly developing and operating Mendubim. Each partner holds an equal economic interest of 30% in the venture, while Alunorte possesses the remaining 10%.
Brazil, recognized as South America’s largest power market, is anticipated to experience significant demand growth in the energy sector. With ongoing deregulation, the de-regulated market now represents around 40% of the country’s total power consumption. This transition offers substantial opportunities for energy companies like Equinor.
The operationalization of the Mendubim solar plant marks a milestone for Equinor, not only enhancing its power production in Brazil by 30% to more than 1.4 TWh in 2024 but also marking its inaugural venture into Brazil’s de-regulated power sector.
With a history of more than two decades in Brazil, Equinor views the country as a pivotal location for its long-term growth strategy, particularly in the renewable energy sector. The company anticipates the Mendubim project to yield base project returns of 4-8%, aligning with its financial objectives.
Equinor’s portfolio in Brazil now encompasses three commercial production assets — the 162 MW Apodi solar plant, the 531 MW Mendubim solar plant and the 223 MW Serra da Babilonia 1 onshore wind farm. Additionally, the company, through its wholly-owned subsidiary Rio Energy, is advancing a pipeline of more than 1.5 GW in solar and onshore wind projects, underscoring its commitment to expanding its renewable energy footprint in Brazil.
Price Performance
Shares of EQNR have underperformed the industry in the past six months. The stock has lost 15.1% compared with the industry’s 4.4% decline.
RPC Inc. (RES - Free Report) derives strong and stable revenues from diverse oilfield services that include pressure pumping, coiled tubing and rental tools. In 2023, the company paid out $34.6 million in dividends, whereas share repurchases totaled $21.1 million.
The Zacks Consensus Estimate for RPC’s 2024 and 2025 earnings per share (EPS) is pegged at 88 cents and $1.13, respectively. The company has a Zacks Style Score of A for Growth and Value.
Valaris (VAL - Free Report) is the industry leader in offshore drilling services across all water depths and geographies. Operating a high-quality rig fleet of ultra-deepwater drillships, versatile semisubmersibles and modern shallow-water jackups, the company has experience working in nearly every major offshore basin.
The Zacks Consensus Estimate for VAL’s 2024 and 2025 EPS is pegged at $4.75 and $10.38, respectively. Valaris has witnessed upward earnings estimate revision for 2024 in the past 60 days. VAL’s 2024 earnings are expected to soar 118.5% year over year.
Murphy USA Inc. (MUSA - Free Report) is a leading independent retailer of motor fuel and convenience merchandise in the United States.
The Zacks Consensus Estimate for MUSA’s 2024 and 2025 EPS is pegged at $25.58 and $25.36, respectively. The company has a Zacks Style Score of B for Value and A for Growth. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.
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Equinor (EQNR) Begins Production at Brazil's Mendubim Plant
Equinor ASA (EQNR - Free Report) announced the commencement of power production at its Mendubim solar plant in Brazil.
The new facility, with a capacity of 531 megawatts (MW), represents a significant expansion in the company’s renewable energy operations, boosting its production in the South American nation by 30%.
Mendubim is set to produce 1.2 terawatt hours (TWh) of electricity annually. A notable portion of this production, about 60%, is secured through a power purchase agreement with Norsk Hydro’s Alunorte, which ranks as one of the largest alumina refineries globally. The remaining electricity generated will be offered in Brazil’s power market, contributing to the nation’s energy mix.
The project is a collaborative effort, with Equinor, Scatec and Hydro Rein — a renewable energy unit of Norsk Hydro, jointly developing and operating Mendubim. Each partner holds an equal economic interest of 30% in the venture, while Alunorte possesses the remaining 10%.
Brazil, recognized as South America’s largest power market, is anticipated to experience significant demand growth in the energy sector. With ongoing deregulation, the de-regulated market now represents around 40% of the country’s total power consumption. This transition offers substantial opportunities for energy companies like Equinor.
The operationalization of the Mendubim solar plant marks a milestone for Equinor, not only enhancing its power production in Brazil by 30% to more than 1.4 TWh in 2024 but also marking its inaugural venture into Brazil’s de-regulated power sector.
With a history of more than two decades in Brazil, Equinor views the country as a pivotal location for its long-term growth strategy, particularly in the renewable energy sector. The company anticipates the Mendubim project to yield base project returns of 4-8%, aligning with its financial objectives.
Equinor’s portfolio in Brazil now encompasses three commercial production assets — the 162 MW Apodi solar plant, the 531 MW Mendubim solar plant and the 223 MW Serra da Babilonia 1 onshore wind farm. Additionally, the company, through its wholly-owned subsidiary Rio Energy, is advancing a pipeline of more than 1.5 GW in solar and onshore wind projects, underscoring its commitment to expanding its renewable energy footprint in Brazil.
Price Performance
Shares of EQNR have underperformed the industry in the past six months. The stock has lost 15.1% compared with the industry’s 4.4% decline.
Image Source: Zacks Investment Research
Zacks Ranks & Stocks to Consider
Equinor currently carries a Zacks Rank #4 (Sell).
Investors interested in the energy sector may look at some better-ranked companies mentioned below. The three companies presently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
RPC Inc. (RES - Free Report) derives strong and stable revenues from diverse oilfield services that include pressure pumping, coiled tubing and rental tools. In 2023, the company paid out $34.6 million in dividends, whereas share repurchases totaled $21.1 million.
The Zacks Consensus Estimate for RPC’s 2024 and 2025 earnings per share (EPS) is pegged at 88 cents and $1.13, respectively. The company has a Zacks Style Score of A for Growth and Value.
Valaris (VAL - Free Report) is the industry leader in offshore drilling services across all water depths and geographies. Operating a high-quality rig fleet of ultra-deepwater drillships, versatile semisubmersibles and modern shallow-water jackups, the company has experience working in nearly every major offshore basin.
The Zacks Consensus Estimate for VAL’s 2024 and 2025 EPS is pegged at $4.75 and $10.38, respectively. Valaris has witnessed upward earnings estimate revision for 2024 in the past 60 days. VAL’s 2024 earnings are expected to soar 118.5% year over year.
Murphy USA Inc. (MUSA - Free Report) is a leading independent retailer of motor fuel and convenience merchandise in the United States.
The Zacks Consensus Estimate for MUSA’s 2024 and 2025 EPS is pegged at $25.58 and $25.36, respectively. The company has a Zacks Style Score of B for Value and A for Growth. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.