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Eni (E) Discovers Oil in Kalimba-1 NFW, Offshore Angola

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Eni SpA (E - Free Report) discovered oil in the southern part of Block 15/06, located in the Kalimba exploration prospect, offshore Angola.

The new find is estimated to hold light oil between 230 million and 300 million barrels in place. So far, the license was primarily estimated to hold gas but the discovery has provided prospects for oil exploration. The discovery is likely to boost the potential value in the block.

Located about 150 kilometers off the coast and 50 kilometers south east from the Armada Olombendo FPSO (East Hub), the Kalimba-1 NFW well was drilled by the West Gemini drillship. The well was drilled to a total depth of 1901 meters in a water depth of 458 meters.

The drilling of Kalimba-1 NFW confirmed a 23 meters net oil pay of high quality oil (33° API) enclosed in Upper Miocene sandstones with outstanding petrophysical properties. The data obtained from Kalimba-1 NFW indicates production capacity of more than 5,000 barrels of oil per day.

Eni, the operator of Kalimba-1 NFW well, holds a stake of 36.8%. The other partners are Sonangol P&P and SSI Fifteen Limited, holding 36.8% and 26.4%, respectively. The co-venturers will operate to evaluate the updip of the discovery and will begin the studies to accelerate its development.

Currently, two oil development projects — West Hub and East Hub — are producing about 150,000 barrels of oil per day (bopd) (100%) in Block 15/06. Eni also operates the Cabinda Norte Block, located onshore Angola.

In 2018, a number of start-ups are expected in block 15/06, including the Upper Miocene, the East Hub and the Subsea Boosting System for the Mpungi field. The Vandumbu field is expected to come online earlier than expected at the end of 2018 and will be linked to the West Hub. The overall production from Block 15/06 will be augmented by 30,000 barrels of oil with these start-ups and the figure will be more than 170,000 bopd gross in 2019.

Angola takes an important place in Eni’s organic growth plans. The company’s presence in the country dates back to 1980. Currently, the company’s equity production in the country is about 155,000 barrels of oil equivalent per day.

Price Performance

In the past three months, Eni’s shares have gained 2.6% compared with the industry’s 6.6% rise.


Zacks Rank & Other Key Picks

Eni currently sportsa Zacks Rank #1 (Strong Buy).

A few other top-ranked players in the same sector are Occidental Petroleum Corporation (OXY - Free Report) and China Petroleum and Chemical Corporation (SNP - Free Report) as well as CVR Refining, LP . These stocks sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Occidental Petroleum is an international oil and gas exploration and production company. It pulled off an average positive earnings surprise of 30.2% in the last four quarters.

Sinopec is one of the largest petroleum and petrochemical companies in Asia. The company delivered an average positive earnings surprise of 492.8% in the last four quarters.

Sugar Land, TX-based CVR Refining is an independent downstream energy partnership with refining and associated logistics properties in the Midcontinent United States. The company delivered an average positive earnings surprise of 7.05% in the last four quarters.

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