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Eni (E) May Offload Mexican Oilfield Stake To Drive Growth

Published 04/06/2018, 05:53 AM
Updated 07/09/2023, 06:31 AM

Eni SpA (NYSE:E) is planning to offload part of its stake in Mexican oilfield to cash in on other opportunities, said Bloomberg.

The integrated energy player is reportedly discussing the sale of 20% to 35% stake in the Campeche Bay oil prospect with prospective buyers, including Qatar Petroleum. Eni presently has full ownership in the massive crude discovery and anticipates to produce first oil by early next year.

The stake divestment plan is in line with the company’s dual exploration model. The model reflects Eni’s intention to gain liquid assets from a potential prospect much before the field starts production. This will also help the company return cash to shareholders through dividend payments. Over the last four years, the dual exploration model has fetched Eni $9 billion, per Bloomberg.

Eni won rights to conduct operations in the two-billion barrels of oil prospect in 2015, when Mexico conducted its second crude auction. The sale of the minority oilfield stake reflects the companies’ participation in active farm out agreement in Mexico. The country has put an end to state monopoly in its upstream operations by opening up the business for other players during 2013.

Headquartered in Rome, Italy, Eni has rallied 12.8% over the past year, outperforming the industry’s 8% gain.

Eni carries a Zacks Rank #3 (Hold). A few better-ranked players in the energy space are W&T Offshore, Inc. (NYSE:WTI) , Pioneer Natural Resources Co. (NYSE:PXD) and Concho Resources Inc. (NYSE:CXO) . All the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

W&T Offshore is expected to see year-over-year earnings growth of 3.6% in 2018.

Pioneer Natural Resources has an average positive earnings surprise of 66.9% for the last four quarters.

Concho will likely see a year-over-year rise of 73.2% in 2018 earnings.

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Eni SpA (E): Free Stock Analysis Report

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Concho Resources Inc. (CXO): Free Stock Analysis Report

W&T Offshore, Inc. (WTI): Free Stock Analysis Report

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