Eni (E) Agrees to Sell $300M Non-Core Congo Assets to Perenco
Eni SpA E, an integrated energy company, and Perenco, an Anglo-French hydrocarbon group, signed a deal for the sale of Eni's participation stake in a number of Congo oil assets. The deal is valued at about $300 million, including firm and contingent consideration, subject to customary adjustments.
According to Eni, the assets are not part of its core operations. With this deal, Eni plans to shift its operations (from oil) toward natural gas, which is expected to account for up to 60% of the group's hydrocarbon output by 2030.
Additionally, the contract aims to advance E's goal of generating 1 billion euros ($1.1 billion) in net cash from the remaining asset sales and acquisitions during 2023-2026.
Eni, which has operated for more than 50 years in the Congo, said that the move is an essential part of its strategy for energy security and natural gas transition.
Eni is currently the only business committed to developing the nation's enormous gas reserves, particularly through the Congo liquefied natural gas (LNG) project. This project will use Marine XII's vast gas reserves to fuel LNG exports and expand Congo’s gas supply to international markets (with a focus on Europe).
As a result of the project, approximately 4.5 billion cubic meters of LNG are anticipated to be produced per year. This will help meet the nation's power needs as well as enable exports to Europe.
Eni is also developing agri-feedstock production initiatives in Congo, intended for biorefining.
Zacks Rank & Key Picks
Currently, Eni carries a Zack Rank #3 (Hold).
Some better-ranked stocks for investors interested in the energy sector are Evolution Petroleum Corporation EPM, NGL Energy Partners LP NGL and RGC Resources Inc. RGCO. While Evolution Petroleum sports a Zacks Rank #1 (Strong Buy), both NGL Energy Partners and RGC Resources carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Evolution Petroleum is an independent energy company. It was formed to acquire and develop oil and gas fields and apply both conventional and specialized technology to accelerate production, particularly in low-permeability reservoirs. EPM has witnessed an upward earnings estimate revision for 2023 and 2024 in the past 60 days.
NGL Energy Partners, headquartered in Tulsa, OK, is a limited partnership operating a vertically-integrated propane business with three operating segments — retail propane, wholesale supply and marketing, and midstream. NGL has witnessed an upward earnings estimate revision for 2024 in the past 30 days.
RGC Resources is a holding company that offers energy and associated products and services through its operational subsidiaries — Roanoke Gas Company and RGC Midstream, LLC. RGCO has thousands of customers through its natural gas distribution companies that serve the Roanoke Valley and Bluefield, Virginia and West Virginia areas.
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