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Eni (E), BF Form Joint Venture to Develop Renewable Products

By Zacks Investment ResearchStock MarketsNov 21, 2021 10:28PM ET
www.investing.com/analysis/eni-e-bf-form-joint-venture-to-develop-renewable-products-200609138
Eni (E), BF Form Joint Venture to Develop Renewable Products
By Zacks Investment Research   |  Nov 21, 2021 10:28PM ET
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Eni SPA E formed a joint venture with the BF Group partner to develop renewable agricultural products for the production of biofuels. The initiative is part of the company’s plans to achieve carbon neutrality by 2050.

The companies, through their 50/50 joint venture, will develop projects to explore and examine agricultural seeds from oil plants, which will be used as feedstock at Eni's bio-refineries.

Eni produces advanced biofuels at its bio-refinery in Gela and Venice Porto Marghera. Advanced biofuels play an important role in reducing greenhouse gas emissions from the transport sector. From 2023, Eni will no longer use palm oil in its manufacturing procedures.

Beside this, the agreement enables Eni to acquire a minority stake in the subsidiary of BF Bonifiche Ferraresi, which is the largest Italy-based farm that utilizes agricultural surface area. The partnership marks Eni’s entry into BF's share capital through a reserved capital increase.

The projects’ testing and experimentation activities will be executed at Bonifiche Ferraresi’s Open Sky Laboratories in Sardinia. The activities will determine the ability to replicate production processes, which are currently used in Italy and other countries where Eni operates, mainly in Africa. The partnership will also focus on developing training programs for employees for agro-feedstock project development sectors.

The agreement reinforces Eni and BF’s extensive experience in the agricultural sector to develop economic diversification initiatives, skill transfer and support for entrepreneurship in Italy and elsewhere. The deal is in sync with Eni's ambition to reduce its carbon footprint, which includes bio-refining as a key factor. The company expects its production capacity to double to 2 million tons by 2024 and a further increase to 5-6 million tons by 2050.

Company Profile & Price Performance

Headquartered in Rome, Italy, Eni is one of the leading integrated energy players in the world.

Shares of Eni have outperformed the industry in the past six months. The stock has gained 14.2% compared with the industry’s 8.2% growth.

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Zacks Rank & Other Key Picks

Eni currently flaunts a Zack Rank #1 (Strong Buy).

Investors interested in the energy sector might look at the following stocks that presently sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Exxon Mobil Corporation (NYSE:XOM)’s XOM bellwether status in the energy space, optimal integrated capital structure and management's track record of capex discipline across the commodity price cycle make it a relatively lower-risk energy sector play. ExxonMobil plays an important role in catering to the need for energy, while committing to make efforts to mitigate the risk of climate change.

In the past year, shares of ExxonMobil have surged 63.7% compared with 39.7% growth of the composite stocks belonging to the industry. XOM’s 2021 earnings are expected to surge 1,636.4% year over year. XOM recently announced its fourth-quarter dividend at 88 cents per share, up from 87 cents in the previous quarter. XOM is has been returning capital to shareholders since the past 39 consecutive years. The energy firm hiked its annual dividend payment.

Range Resources Corporation (NYSE:RRC) RRC, based in Fort Worth, TX, is an independent energy company that engages in the exploration, development and acquisition of oil and gas properties, primarily in the Appalachian Basin and North Louisiana. RRC is among the top 10 natural gas producers in the United States. It is among the top NGL producers in the domestic market. As of 2020 end, RRC’s total proved reserves were 17.2 trillion cubic feet equivalent.

In the past year, shares of Range Resources’ have increased 169.8% compared with industry’s growth of 108.7%. In the past 60 days, the Zacks Consensus Estimate for RRC's 2021 earnings has been raised by 24.6%. RRC’s 2021 earnings are expected to surge 2,522.2% year over year. Range Resources witnessed five upward revisions in the past 30 days.

Callon (NYSE:CPE) Petroleum Company CPE solely focuses on the exploration, and production of oil and gas resources in the Permian Basin. CPE boasts an impressive footprint throughout the core of the Permian Basin, which is the highest-producing shale play in the United States. Callon Petroleum, which is currently valued at $2.9 billion, entered the basin in 2009 and has been strengthening its foothold in the region since then.

In the past year, shares of Callon Petroleum have soared 428.7% compared with Zacks Exploration and Production Industry's growth of 108.7%. CPE's 2021 earnings are expected to skyrocket 212% year over year. CPE currently sports a Zacks Style Score of A for Growth and Momentum.


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Eni (E), BF Form Joint Venture to Develop Renewable Products
 

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Eni (E), BF Form Joint Venture to Develop Renewable Products

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