Equinor To Boost US GoM Footprint Via Caesar Tonga Purchase
Zacks Investment Research | May 15, 2019 06:28AM ET
Equinor ASA (NYSE:EQNR) recently announced that the company has exercised preferential rights to obtain a 22.45% additional stake from Royal Dutch Shell (LON:RDSa) plc was thinking of offloading the 22.45% non-operated stake to a subsidiary of Delek Group Ltd., an Israeli conglomerate, for the same amount of cash. From Shell’s point of view, the latest deal is in line with its ongoing $10-billion divestment program, which followed the $30-billion divestment program in the 2016-2018 time frame. The proceeds from the Caesar Tonga divestment are expected to be directed toward more long-term value-generating assets.
Located 290 kilometers southwest of New Orleans, the oil field — which came online in early-2012 — is one of the biggest deepwater resources in the prolific GoM. Currently, Equinor’s net production from the field stands at 18,600 barrels of oil equivalent per day. The latest deal will further increase the company’s footprint in the productive basin. The transaction has an effective date of Jan 1, 2019. Notably, this year, it will start drilling the Monument prospect in the region.
While Anadarko Petroleum Corporation (NYSE:APC) is the operator of the Caesar Tonga field with a 33.75% stake, Chevron Corporation (NYSE:CVX) holds the remaining 20.25% interest.
Price Performance & Zacks Rank
Equinor has lost 23% in the past year compared with 15.3% collective decline of the .
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