According to a report recently published by Bloomberg, Exxon Mobil Corporation (XOM - Free Report) is contemplating the divestment of some oil fields in Norway’s North Sea. Reportedly, the sale could generate more than $1 billion.
Although Exxon had talks with potential buyers, the sources reveal that it is not going through a formal process. According to the sources, Exxon may sell Ringhorne, Balder and Sigyn oil fields in Norway. During 2015, these three fields along with Jotun oil field, which is currently in the process of closing down, produced roughly 64,000 barrels of oil equivalent per day.
Exxon’s intention to divest the Norwegian assets is in line with the decision of other energy majors like Royal Dutch Shell plc (RDS.A - Free Report) to exit the North Sea. TOTAL S.A. (TOT - Free Report) is also considering the divestment of 51% interest in its Martin Linge project, located off the coast of Norway. According to sources, these asset sales reflect the strategy of energy sector players to lower cost amid persistent weak oil prices.
Irving, TX-based Exxon is the world’s largest publicly traded oil company, which is engaged in oil and natural gas exploration and production, petroleum products refining and marketing, chemicals manufacture, and other energy-related businesses. The company is the world’s best run integrated oil company, given its track record of high return on capital employed.
However, the persistent weakness in crude prices has been dragging the company’s upstream business.
As a result, Exxon carries a Zacks Rank #3 (Hold), implying that it will perform in line with the broader U.S. equity market over the next one to three months.
EXXON MOBIL CRP Price
A better-ranked player in the energy sector is EQT Midstream Partners LP (EQM - Free Report) . The partnership sports a Zacks Rank #1 (Strong Buy) and beat the Zacks Consensus Estimate in three of the last four quarters with an average surprise of 7.17%. You can see the complete list of today’s Zacks #1 Rank stocks here.
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