U.S. Markets closed

Eni (E) Divests Pakistan Assets to Local JV to Increase Cash Flow

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·3 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Eni SPA E entered an agreement to divest its Pakistan assets to Prime International Oil & Gas Company as part of plans to eliminate its non-core assets to boost the cash flow.

Notably, Prime International is a new-founded 50/50 joint venture between Eni’s former local officials and Hub Power Company Ltd, which is recognized as the largest Independent Power Producer in Pakistan.

The drive came as the global slowdown in economic activities caused by the pandemic had a devastating effect on the company’s cash flow and the growing pressure drom investors to shift to cleaner energy sources.

The divestment comprises the company’s eight development and production leases in the Kithar Fold Belt. Further, it involves the Middle Indus Basins as well as four exploration licenses in the Middle Indus and the Indus Offshore Basins.

The Italian energy major mentioned that its main permits were in Bhit/Badhra fields, where it owned a 40% participating interest, and Kadanwari, with an 18.4% interest. The company’s other assets were in the permits for Latif, Zamzama and Sawan, with 33.3%, 17.5% and 23.7% interests, respectively. Prime International has also acquired the 10-MW photovoltaic plant of Eni.

Notably, the divestiture marks Eni’s exit from Pakistan and is in line with its four-year strategic plan to restructure the company's portfolio, extract additional value from its strategic assets and eliminate non-core businesses. The company commits to fully decarbonize all its products and processes by 2050 to meet its ambitious renewable energy targets.

Company Profile

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

Zacks Rank & Other Stocks to Consider

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

Some other top-ranked players in the energy space are Royal Dutch Shell Plc RDS.A, currently sporting a Zacks Rank #1, and Suncor Energy Inc. SU and Valero Energy Corporation VLO, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shell’s earnings for 2021 are expected to rise 19.9% year over year.

Suncor’s earnings for 2021 are expected to surge 138.2% year over year.

Valero Energy’s earnings for 2021 are expected to surge 815.7% year over year.

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Valero Energy Corporation (VLO) : Free Stock Analysis Report
 
Suncor Energy Inc. (SU) : Free Stock Analysis Report
 
Eni SpA (E) : Free Stock Analysis Report
 
Royal Dutch Shell PLC (RDS.A) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research