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BP Acquires Stake In Offshore Australia To Boost LNG Venture

By Zacks Investment ResearchStock MarketsOct 12, 2016 10:33PM ET
www.investing.com/analysis/bp-acquires-stake-in-offshore-australia-to-boost-lng-venture-200158559
BP Acquires Stake In Offshore Australia To Boost LNG Venture
By Zacks Investment Research   |  Oct 12, 2016 10:33PM ET
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BP plc (NYSE:BP) recently acquired an interest in an offshore exploration permit off Western Australia. The asset is believed to contain a massive gas prospect and is likely to be drilled in the first half of 2018. The buyout is targeted toward the development of supply options for the North West Shelf LNG venture.

The aforesaid deal, which will be with Cue Energy Resources, will take BP’s stake in WA-409-P permit to 80%. This apart, the supermajor will get an option to purchase 42.5% of the WA-359-P permit.

The deal comes soon after BP’s decision to discontinue exploration drilling program in the Great Australian Bight, offshore South Australia, which is considered to be one of the world’s last frontier exploration territories.

Located about 50 kilometers from the North West Shelf plant, the Ironbark prospect is the main focus of the deal. The field is also adjacent to Woodside Petroleum Ltd.’s Pluto project and Chevron Corp.’s (NYSE:CVX) Wheatstone infrastructure that is currently under development.

BP, along with its five joint venture partners in North West Shelf, is focusing on extending the life of the existing LNG plant with gas from new sources off the West Australian coast.

BP’s upstream strategy is to emphasize on the exploration of prospects that are expected to create value in the near to medium term, mainly based on its significant existing upstream positions. The Cue Energy deal is in sync with this strategy.

In terms of assets, BP owns a strong and diversified portfolio of global energy businesses that offer attractive long-term growth opportunities. The company’s strong inventory of development projects should support volume growth in the long run.

BP has been able to counter the challenging macro environment and improve its economics on the back of certain strategic initiatives. These include cost reduction, the exercise of capital discipline, efficiency gains and consistent execution.

Currently, BP carries a Zacks Rank #3 (Hold). Some better-ranked players from the energy sector include Bill Barrett Corp (NYSE:BBG) and Evolution Petroleum Corp. (NYSE:EPM) . Both these stocks sport a Zacks Rank #1 (Strong Buy). You can seethe complete list of today’s Zacks #1 Rank stocks here.

Bill Barrett posted a positive earnings surprise of 38.1% in the preceding quarter. It reported a positive earnings surprise in three of the four preceding quarters.

In the last reported quarter, Evolution Petroleum Corp. delivered a positive earnings surprise of 350.00%. Coming to the earnings surprise history, the company beat estimates in two of the last four quarters.

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BP PLC (BP): Free Stock Analysis Report

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EVOLUTION PETRO (EPM): Free Stock Analysis Report

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BP Acquires Stake In Offshore Australia To Boost LNG Venture
 

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BP Acquires Stake In Offshore Australia To Boost LNG Venture

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