ExxonMobil (XOM - Free Report) recently announced an accord with Ghana government for exploring offshore crude resources in the Deepwater Cape Three Points block.
Officials of Ghana told Reuters that owing to the characteristic of the oil block, spreading across 366,000 acres, the government did not arrange for the bidding process. For the exploration activities, ExxonMobil — the largest publicly traded oil payer — directly negotiated with the government.
ExxonMobil expects exploration work on the block, awaiting consent from the parliament, to start later this year. The upstream operations will comprise seismic data gathering along with detailed analysis.
In the upstream project, ExxonMobil will likely be the operator with 80% ownership. Ghana National Petroleum Corporation, the national oil company of Ghana, is expected to have a 15% interest. ExxonMobil along with the government plans to find a potential energy player in Ghana for the remaining 5%.
Management added that the recent agreement shows ExxonMobil’s strong focus on resources that that might hold significant oil and gas reserves.
Irving, TX-based ExxonMobil has a leading position in the energy industry owing to the size and diversity of its asset base, both in terms of business mix and geographical footprint. With a stable cash position, the company’s balance sheet is one of the best in the industry.
However, the company’s pricing chart is not impressive. Over the past year, the stock has gained 1.8%, underperforming the industry’s 14% rally.
ExxonMobil carries a Zacks Rank #3 (Hold). A few better-ranked players in the energy sector are EOG Resources, Inc. (EOG - Free Report) , ConocoPhillips (COP - Free Report) and Cabot Oil & Gas Corporation (COG - Free Report) . All the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Headquartered in Houston, TX, EOG Resources is a leading integrated energy player. The company is expected to post year-over-year earnings growth of 156.5% in 2017.
Headquartered in Houston, TX, ConocoPhillips is an upstream energy player. The company’s 2017 earnings are estimated to grow 121.4%.
Headquartered in Houston, TX, Cabot is involved in the exploration of oil and gas. The stock will likely report earnings growth of 357.1% in 2017.
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