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Repsol (REPYY) Explores Minority Stake Sale in Alaska Oilfields
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Repsol (REPYY - Free Report) , in collaboration with Santos, is actively exploring the sale of a minority stake in several oilfields they jointly own in Alaska, potentially valuing the deal at $1 billion, per Reuters.
The strategic decision includes the significant Pikka project, alongside interests in the Horseshoe and Quokka fields, all located in Alaska’s prolific North Slope region.
At the heart of the assets up for partial sale is the Pikka project, which stands as one of Alaska’s largest oil prospects. Valued at $4.5 billion by Rystad Energy, a consultancy firm, Pikka represents a substantial portion of the potential deal’s value. The sale also encompasses partial interests in the Horseshoe and Quokka fields, further enhancing the attractiveness of this investment opportunity.
The sale process is being facilitated by an undisclosed investment bank, which is working closely with Santos and Repsol to manage the intricacies of the transaction. The arrangement proposed would involve non-operating positions, allowing the new stakeholders to benefit from hydrocarbon sales without the need to directly engage in drilling or operational activities. However, they would still be responsible for covering a portion of the operational costs.
Potential investors in these assets must consider several factors that could impact the viability and attractiveness of the deal. Notably, there are legal challenges related to access to roads in a neighboring oilfield owned by a unit of ConocoPhillips (COP - Free Report) , the largest operator in the North Slope.
Additionally, North Slope projects, including the nearby Willow project of ConocoPhillip, have faced significant opposition from indigenous residents and conservation groups. Despite these hurdles, such projects have moved forward, indicating a complex regulatory and social environment.
The decision to sell comes at a time when oil and gas companies are increasingly weighing the balance between energy production and environmental responsibility. With ongoing global conversations about energy sustainability and climate change, the eventual buyers will need to navigate the operational challenges and societal impacts of their investments, particularly in sensitive regions like the North Slope.
SM Energy Company (SM - Free Report) is an independent oil and gas company engaged in the exploration, exploitation, development, acquisition, and production of oil and gas in North America.
The Zacks Consensus Estimate for SM’s 2024 and 2025 EPS is pegged at $6.46 and $7.35, respectively. The stock has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.
Ecopetrol S.A. (EC - Free Report) operates across various sections of the oil and gas industry, including the exploration, development, and production of oil and gas, refining, transportation, and the sale of petroleum products.
Ecopetrol has witnessed upward earnings estimate revisions for 2024 and 2025 in the past seven days. The Zacks Consensus Estimate for EC’s 2024 and 2025 EPS is pegged at $2.54 and $2.61, respectively.
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Repsol (REPYY) Explores Minority Stake Sale in Alaska Oilfields
Repsol (REPYY - Free Report) , in collaboration with Santos, is actively exploring the sale of a minority stake in several oilfields they jointly own in Alaska, potentially valuing the deal at $1 billion, per Reuters.
The strategic decision includes the significant Pikka project, alongside interests in the Horseshoe and Quokka fields, all located in Alaska’s prolific North Slope region.
At the heart of the assets up for partial sale is the Pikka project, which stands as one of Alaska’s largest oil prospects. Valued at $4.5 billion by Rystad Energy, a consultancy firm, Pikka represents a substantial portion of the potential deal’s value. The sale also encompasses partial interests in the Horseshoe and Quokka fields, further enhancing the attractiveness of this investment opportunity.
The sale process is being facilitated by an undisclosed investment bank, which is working closely with Santos and Repsol to manage the intricacies of the transaction. The arrangement proposed would involve non-operating positions, allowing the new stakeholders to benefit from hydrocarbon sales without the need to directly engage in drilling or operational activities. However, they would still be responsible for covering a portion of the operational costs.
Potential investors in these assets must consider several factors that could impact the viability and attractiveness of the deal. Notably, there are legal challenges related to access to roads in a neighboring oilfield owned by a unit of ConocoPhillips (COP - Free Report) , the largest operator in the North Slope.
Additionally, North Slope projects, including the nearby Willow project of ConocoPhillip, have faced significant opposition from indigenous residents and conservation groups. Despite these hurdles, such projects have moved forward, indicating a complex regulatory and social environment.
The decision to sell comes at a time when oil and gas companies are increasingly weighing the balance between energy production and environmental responsibility. With ongoing global conversations about energy sustainability and climate change, the eventual buyers will need to navigate the operational challenges and societal impacts of their investments, particularly in sensitive regions like the North Slope.
Zacks Ranks & Stocks to Consider
Repsol currently carries a Zacks Rank #4 (Sell).
Investors interested in the energy sector may look at some better-ranked companies mentioned below. These three companies presently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
SM Energy Company (SM - Free Report) is an independent oil and gas company engaged in the exploration, exploitation, development, acquisition, and production of oil and gas in North America.
The Zacks Consensus Estimate for SM’s 2024 and 2025 EPS is pegged at $6.46 and $7.35, respectively. The stock has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.
Ecopetrol S.A. (EC - Free Report) operates across various sections of the oil and gas industry, including the exploration, development, and production of oil and gas, refining, transportation, and the sale of petroleum products.
Ecopetrol has witnessed upward earnings estimate revisions for 2024 and 2025 in the past seven days. The Zacks Consensus Estimate for EC’s 2024 and 2025 EPS is pegged at $2.54 and $2.61, respectively.