Eni's (E) Partly-Owned Var Energi Wins 13 Licenses In NCS
Zacks Investment Research | Jan 20, 2019 08:21PM ET
Var Energi, a company owned by Eni SpA (NYSE:E) and HitecVision, has won rights to 13 licenses in the Awards in Predefined Areas 2018 (APA) by the Ministry of Petroleum and Energy of Norway (MPE).
Of the total licenses, Eni has received operatorship for 4 licenses — PL 985 and PL 980 in the North Sea along with PL 1025 S and PL 229 in the Barents Sea. All the licenses span across the three main oil and gas provinces in the Norwegian Continental Shelf (NCS). The other licenses wherein Eni will become a partner are PL 987, PL 988, PL 984, PL 978 and PL 977 in the North Sea as well as PL 1010, PL 1001, PL 1005 and PL 796 B in the Norwegian Sea.
These awards are in sync with Var Energi’s strategy to further reinforce its position as a major independent exploration and production company on the NCS. The new licenses will augment the company’s portfolio around operated hubs and present growth opportunities in other unexplored areas.
Eni expects oil and gas production in 2018-2021 to grow at 4% per year. Project start-ups in Angola, Egypt, Ghana, Indonesia and Kazakhstan will enable the company achieve 4% targeted output growth through 2021. Additionally, we are optimistic about the company’s exit from low-profit operations and efforts to expand international asset base.
An independent exploration and production (E&P) company, Var Energi is the largest on the NCS. In 2018, the company had an average production of more than 170,000 barrels of oil equivalent per day (boepd) with a target of 250,000 boepd by early 2020. The company operates oil and gas production across the entire shelf with fields in the Barents Sea, the Norwegian Sea and the North Sea. Eni has a share of 69.6% in Var Energi, while the remaining 30.4% is held by HitecVision.
Zacks Rank & Stocks to Consider
Eni currently carries a Zacks Rank #4 (Sell).
A few better-ranked players in the energy space are NextEra Energy (NYSE:NEE) Partners L.P. (NYSE:E) , Sunoco L.P (NYSE:SUN) and TransCanada Corporation (TO:TRP) , each sporting a Zacks Rank #1 (Strong Buy). You can see Zacks Investment Research
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