Exxon Mobil Corporation (XOM - Free Report) recently announced the permanent closure of production activities in the Sable Island Offshore Energy Project. However, the largest publicly traded energy firm will continue to explore the resources.
The integrated player added that with the shutdown of the offshore gas project, the company will carry on operations associated to decommissioning and plugging of wells through 2019.
In the past years, production from the development — located off the coast of Nova Scotia — had been on the decline. In fact, few years back, ExxonMobil recognized that the productive life of the offshore natural gas development had almost reached its end. Investors should know that the output of raw gas from the project had been steadily declining after hitting peak production of 482 million cubic feet per day (MMcf/D) in December 2001, per S&P Global Platts Analytics. The source added that the average daily production from the project plunged to 50 MMcf/D during the fourth quarter of 2018.
Headquartered in Irving, TX, ExxonMobil is involved in all phases of energy businesses — upstream, midstream and downstream businesses.
Over the last two years, ExxonMobil has been investing majority of its capital in upstream operations. The integrated energy player has the same plans for 2019. With the oil price scenario likely to remain weak till mid-2019, the company’s massive capital allocations are unlikely to generate handsome returns in the near term.
As a result, the stock carries a Zacks Rank #5 (Strong Sell). Meanwhile, a few better-ranked players in the energy space are Unit Corporation (UNT - Free Report) , Bonanza Creek Energy, Inc. (BCEI - Free Report) and TC PipeLines, LP (TCP - Free Report) . While TC PipeLines carries a Zacks Rank #2 (Buy), Bonanza and Unit sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
TC PipeLines beat the Zacks Consensus Estimate in three of the last four quarters, the average positive earnings surprise being 15.6%.
Bonanza will likely post earnings growth of 57.3% through 2019.
Unit Corporation surpassed the Zacks Consensus Estimate in three of the last four quarters, the average positive earnings surprise being 21.3%.
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