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Eni (E) Receives New License, Lease Extensions in Egypt

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Egyptian authorities have granted Eni SpA (E - Free Report) a new exploration license — Nour — in the East Nile Delta Basin of the Mediterranean Sea.

Nour is located about 50 kilometers offshore in the Eastern Mediterranean and lies in water depth of 50-400 meters. It has acreage of about 739 square kilometer. The new Concession Agreement is intended at governing an offshore exploration license. In the second half of 2018, Eni intends to advance with the drilling of an exploration well.

Eni operates Nour through its subsidiary IEOC with a stake of 85%. The other partner in the concession, in participation with Egyptian Natural Gas Holding Company ("EGAS"), is Tharwa Petroleum Company with15% stake.

In another announcement, Eni announced that it has received a ten-year extension of the Abu Madi West Development Lease along with a five-year extension of the Ras Qattara Concession Agreement and relevant Development Lease.

A new Nile Delta Concession Agreement authorized by the Egyptian Authorities facilitated these extensions.

Nooros field is located in the Abu Madi West Development Lease, which is spread over an area of 203 square kilometers. This extension allows the execution of further exploration activities within El Qar’a Exploration Lease spanning more than64 square kilometers. Great Nooros Area, one of the most abundant areas of the Nile Delta, offshore Egypt, holds these assets.

Moreover, the extension of Ras Qattara Concession Agreement is expected to yield remaining hydrocarbon reserves and enable further exploration activities within the Western Desert basin. Spread over an area of 104 square kilometer, Ras Qattara concession is operated by AGIBA — a joint venture between Eni’s subsidiary IEOC and Egyptian General Petroleum Corporation ("EGPC"). Eni has a stake of 75% in the concession, while INA holds 25%.

The lease extension of Great Nooros Area’s asset strengthens Eni’s gas portfolio and establishes the success of Eni’s strategy of near field exploration that has revived production in the Nile Delta area. Currently, the Nooros field, part of the Nile Delta area, is producing 32 million cubic meters of gas per day or about 215,000 boed.

Eni, through its subsidiary IEOC, has a stake of 75% in the Concession. The other partner is BP plc (BP - Free Report) , holding 25%. Nile Delta is operated by Petrobel, a joint venture between IEOC and EGPC.

AGIBA oil operated production in the Western Desert area will be strengthened by the extension of the Ras Qattara.

Price Performance

Eni has outperformed the industry in the past year. The company’s shares have returned 13.3% compared with the industry's 13.8% rise.


Zacks Rank & Stocks to Consider

Eni currently carries a Zacks Rank #3 (Hold).

A few better-ranked players in the same sector are PetroleoBrasileiro S.A. (PBR - Free Report) or Petrobras SA and Helix Energy Solutions Group, Inc (HLX - Free Report) . Both these stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

PetroleoBrasileiro S.A. (PBR - Free Report) , or Petrobras SA, is the largest integrated energy firm in Brazil and one of the largest in Latin America. It pulled off an average positive earnings surprise of 10.4% in the last four quarters.

Helix Energy offers specialty services to the offshore energy industry The company delivered an average positive earnings surprise of 66.7% in the trailing four quarters.

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