Eni SPA E announced a major oil and gas discovery with Sonatrach in Algeria’s gas-rich Berkine Nord basin.
The discovery is located in the Zemlet el Arbi concession in the Algerian desert. It is operated by Eni and Sonatrach. The latest discovery is estimated to contain 140 million barrels of crude oil.
The companies drilled the exploration well on the HDLE exploration prospect, located approximately 15 kilometers from the processing facilities of the Bir Rebaa North field. The HDLE-1 well discovered light oil in the Triassic sandstones of the Tagi formation. It encountered 26 meters of net oil and gas head, with excellent petrophysical properties.
HDLE-1 is the first well of the new exploration campaign planned for the North Berkine Basin. The exploration campaign includes the drilling of five wells in the North Berkine concessions. During the production test, the well delivered 7,000 barrels of oil per day and associated gas of 5 million standard cubic feet per day.
Since 1981, Eni has contributed to the growth of Algeria, where it operates several concessions. The company has a production capital of 95,000 barrels of oil equivalent per day in the country. The latest discovery will support Eni’s near-field and infrastructure-focused exploration strategy, enabling rapid assessment of new resources.
In December 2021, Sonatrach and Eni signed an oil exploration and production contract in the onshore zone of the Berkine basin to extend their partnership in Algeria. The companies also signed a memorandum of understanding to work on initiatives aimed at Algeria’s energy transition.
Eni plans to drill four additional appraisal wells in Algeria. A second well, HDLE-2, will be drilled in April to confirm the additional capacities of the structure extending into the adjacent Sif Fatima 2 concession. Alongside this, Eni and Sonatrach plan to continue the production phase of the last discovery, with production expected in the third quarter of 2022.
Company profile and price performance
Based in Rome, Italy, Eni is one of the world’s leading integrated energy players.
Eni shares underperformed industry over the past six months. The stock gained 12.2% against industry growth of 37.2%.
Image source: Zacks Investment Research
Zacks Ranking and Stocks to Consider
Eni currently wears a Zack Rank #3 (Hold).
Investors interested in energy The industry could look at the following companies that currently have a Zacks #1 (Strong Buy) ranking. You can see the full list of today’s Zacks #1 Rank stocks here.
Oil Oasis OAS is an independent exploration company engaged in the acquisition and development of oil and gas resources. At the end of 2021, the OAS had a proven reserve of 250.8 million barrels of oil equivalent (MMBoe) in the Williston Basin.
Oasis Petroleum is expected to see earnings growth of 198.8% in 2022. OAS currently pays a quarterly dividend of 58.5 cents ($2.34 annualized). It recently completed a $100 million share buyback program.
Based in Houston, TX, Conoco Phillips COP is primarily engaged in the exploration and production of oil and natural gas. The COP ended 2021 with proven reserves of 6.1 billion barrels of oil equivalent (Boe).
ConocoPhillips earnings for 2022 are expected to increase 74% year over year. COP has revised upwards its expected return of capital for 2022 to shareholders. The new forecast is $8 billion, which is an increase from the previously mentioned $7 billion.
Based in Calgary Imperial Oil Limited IMO is one of the largest integrated oil companies in Canada. Its debt to capitalization ratio of 19.3% is quite conservative compared to 32.7% for the sub-sector to which it belongs. In addition to its industry’s low leverage, Imperial Oil has ample liquidity, with cash and cash equivalents of C$1.5 billion.
Imperial is expected to see earnings growth of 95% in 2022. IMO remains firmly committed to returning money to investors in the form of dividends. The company’s board of directors recently approved an increase in the quarterly dividend payment. The new payout of 34 Canadian cents is 26% higher than the previous dividend. Additionally, in keeping with the company’s long-standing obligation to its shareholders, Imperial Oil has revised its existing stock purchase policy to purchase up to 4% of outstanding common stock.
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