Eni (E) Receives Approval For Nour Concession Stake Sale
Zacks Investment Research | Dec 09, 2018 08:32PM ET
The Egyptian government approved Eni SpA’s (NYSE:E) sale of a stake in the Nour North Sinai Offshore concession, Egypt, to Mubadala Petroleum and BP plc (NYSE:BP) .
A stake of 20% will be sold to Mubadala Petroleum, a wholly-owned subsidiary of Mubadala Investment Company and a participating interest of 25% will be divested to BP. The approval follows the company’s Farm Out agreements with Mubadala Petroleum in November and BP in December.
Post completion of the sale, Eni will hold a stake of 40% along with Egyptian Natural Gas Holding Company (EGAS). Tharwa Petroleum Company is among the other partners holding 15% of the contractor’s share.
Located in the prolific East Nile Delta Basin of the Mediterranean Sea, the Nour block lies about 50 kilometers offshore in the Eastern Mediterranean. It has a water depth of 50-400 meters and is spread across 739 square kilometers.
Currently, drilling of the exploration well is being carried out by Eni as anticipated in the first exploration period of the Nour concession.
The transaction is in sync with Eni’s strategy to seek wider international business association with BP and strengthen the relationship with Mubadala Petroleum in Egypt.
Eni’s presence in Egypt dates back to 1954, where it operates through the subsidiary IEOC. The company is the main producer in the country with an equity production of about 340 thousand barrels of oil equivalent per day.
The company’s constant efforts to expand upstream operations will go a long way in generating profits. The company expects production growth of hydrocarbon through 2018 of 3%, primarily supported by ramped-up production from Egypt’s Zohr and Noroos gas fields. Moreover, start-up of new upstream projects in Ghana and Indonesia will continue to support Eni's oil production.
Zacks Rank & Other Key Picks
Currently, Eni sports a Zacks Rank #1 (Strong Buy).
A few other top-ranked players in the same sector are Enterprise Products Partners L.P. (NYSE:EPD) and SunCoke Energy, Inc (NYSE:SXC) , each sporting a Zacks Rank #1. You can see Original post
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