Per Reuters, oil major ExxonMobil Corporation (XOM - Free Report) intends to enhance natural gas output in Argentina's VacaMuerta shale play by making an investment of $200 million.
A 35-year unconventional production concession in the Los Toldos I Sur block has also been requested by the company from the government of Neuquen province. Darren Woods, CEO of ExxonMobil, has discussed plans with President Mauricio Macri during a meeting at the presidential Pink House.
VacaMuerta play, which is considered one of the world's largest unconventional gas reserves, is an important asset for the business-friendly administration of Macri as it seeks to increase domestic production of energy. Attracting investment to the VacaMuerta play is also believed to decrease imports that are expensive.
In 2016, ExxonMobil had announced its plan of investing over $10 billion in the prospective shale play spread over a period of 20-30 years. In January, the President had also reached an agreement with the unions and companies to decrease the labor costs so as to attract investments. However, the executives have observed that logistics are still expensive.
The Argentine affiliate of ExxonMobil is the operator of the Los Toldos I Sur block and has 80% ownership interest. Other partners are Gas y Petroleo de Neuquen and Tecpetrol SA each holding 10%, respectively.
Irving, TX-based ExxonMobil is the world’s largest publicly traded oil company, engaged in oil and natural gas exploration and production, petroleum products refining and marketing, chemicals manufacture and other energy-related businesses. Significant portion of ExxonMobil's earnings come from its operations outside the United States.
The company has been investing heavily in its extensive refining businesses, which is expected to help it counter expensive offshore drilling operations. However, year to date, shares of ExxonMobil have lost 15.2% compared with the industry’s decline of 5.8%.
Zacks Rank & Stock Picks
Currently, ExxonMobil carries a Zacks Rank #3 (Hold). A few better-ranked players in the energy sector include TransCanada Corporation (TRP - Free Report) , Transmontaigne Partners LP (TLP - Free Report) and Range Resources Corporation (RRC - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Headquartered in Calgary, Canada, TransCanada is a midstream energy firm in North America. The company delivered an average positive earnings surprise of 4.06% over the last four quarters.
Transmontaigne, headquartered in Denver, CO, involves in transporting and storing refined petroleum products. The firm delivered an average positive earnings surprise of 6.60% over the last four quarters.
Based in Fort Worth, TX, Range Resources is an independent oil and gas company, engaged in the exploration, development and acquisition of U.S. oil and gas resources. The company’s 2017 earnings are estimated to grow 1587.17%.
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