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ExxonMobil and Sonatrach Sign Exploration & Development MoU
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Exxon Mobil Corporation (XOM - Free Report) recently signed a memorandum of understanding (MoU) with Algeria’s state-run hydrocarbon company, Sonatrach. The deal focuses on potential exploration and development opportunities in the North African country. Algeria’s oil-dependent economy will likely improve from the agreement.
The OPEC country introduced new hydrocarbon laws last January to bring in more investments. Algeria’s production and exports have declined in the past few years due to declining foreign investments amid growing demand in the domestic market. The country’s economy has significant reliance on earnings from oil and gas productions. As such, declining oil prices and export volumes have affected the state’s finances in recent years. The most recent crude price crash, triggered by the coronavirus pandemic, forced the government to slash public spending by 30%.
The global oil market is currently suffering from oversupply and demand destruction due to coronavirus-induced lockdowns and travel bans. The situation is expected to improve once the restrictions are removed. As such, focus on low-cost exploration and development opportunities in Algeria will benefit ExxonMobil in the long term. To navigate through the current market uncertainty, ExxonMobil stated earlier that it plans to slash 2020 capital spending plan by 30% or $10 billion from its original guidance to $23 billion.
On a positive note, ExxonMobil expects long-term industry fundamentals to remain unchanged. As such, demand will rise as soon as the market reverts back to its normal state. Keeping the long-term aspect in mind, the company is trying to keep its major projects unaffected. Therefore, it expects the current offshore Guyana operations to be unaffected as well. The commencement of the second phase of the Liza development is scheduled for 2022. However, due to the current deferred activities, its Payara development can be delayed by six months to a year.
Price Performance
The company’s stock has plunged 41.3% year to date compared with 40.3% fall of the industry it belongs to.
RGC Resources’ 2020 earnings per share are expected to rise 14.8% year over year.
Murphy USA’s 2020 earnings per share are expected to rise 22.6% year over year.
Comstock Resources’ 2020 sales are expected to gain 33.1% year over year.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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ExxonMobil and Sonatrach Sign Exploration & Development MoU
Exxon Mobil Corporation (XOM - Free Report) recently signed a memorandum of understanding (MoU) with Algeria’s state-run hydrocarbon company, Sonatrach. The deal focuses on potential exploration and development opportunities in the North African country. Algeria’s oil-dependent economy will likely improve from the agreement.
The OPEC country introduced new hydrocarbon laws last January to bring in more investments. Algeria’s production and exports have declined in the past few years due to declining foreign investments amid growing demand in the domestic market. The country’s economy has significant reliance on earnings from oil and gas productions. As such, declining oil prices and export volumes have affected the state’s finances in recent years. The most recent crude price crash, triggered by the coronavirus pandemic, forced the government to slash public spending by 30%.
The global oil market is currently suffering from oversupply and demand destruction due to coronavirus-induced lockdowns and travel bans. The situation is expected to improve once the restrictions are removed. As such, focus on low-cost exploration and development opportunities in Algeria will benefit ExxonMobil in the long term. To navigate through the current market uncertainty, ExxonMobil stated earlier that it plans to slash 2020 capital spending plan by 30% or $10 billion from its original guidance to $23 billion.
On a positive note, ExxonMobil expects long-term industry fundamentals to remain unchanged. As such, demand will rise as soon as the market reverts back to its normal state. Keeping the long-term aspect in mind, the company is trying to keep its major projects unaffected. Therefore, it expects the current offshore Guyana operations to be unaffected as well. The commencement of the second phase of the Liza development is scheduled for 2022. However, due to the current deferred activities, its Payara development can be delayed by six months to a year.
Price Performance
The company’s stock has plunged 41.3% year to date compared with 40.3% fall of the industry it belongs to.
Zacks Rank & Stocks to Consider
Currently, ExxonMobil has a Zacks Rank #3 (Hold). Some better-ranked players in the energy space are RGC Resources Inc. (RGCO - Free Report) , Murphy USA Inc. (MUSA - Free Report) and Comstock Resources, Inc. (CRK - Free Report) , each having a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
RGC Resources’ 2020 earnings per share are expected to rise 14.8% year over year.
Murphy USA’s 2020 earnings per share are expected to rise 22.6% year over year.
Comstock Resources’ 2020 sales are expected to gain 33.1% year over year.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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