Eni SpA E announced that it has commenced drilling the Rowallan exploration well — 22/19c-g — in the North Sea offshore the U.K.
Eni’s partner in the offshore block, Serica Energy stated that the well was targeting the high-pressure and high-temperature gas condensate Rowallan prospect. The prospect is estimated to contain a large structural fault and dip-closed trap in the east of Block 22/19c in the Central North Sea. The heavy duty jack-up rig, Ensco 121, is being used to drill the well.
The well is intended to penetrate high-quality sandstones at the Middle Jurassic and Triassic levels, which are optimally situated for hydrocarbon charge from the nearby Monan and Mungo oil fields. Per an independent person’s report estimates, Serica Energy’s net Rowallan prospective resources are anticipated at about 20-60 million barrels of oil equivalent (mmboe), in P50 and P10, respectively, within block 22/19c.
There is further upside potential provided by the adjacent Dundonald and Sundrum prospects post the success of the drilling, which are geologically similar to Rowallan. The prospect may also extend onto Serica’s 30th Round blocks, which have been awarded recently, directly to the south.
Serica Energy said that drilling of the well is expected to take around 140 days.
Eni is the operator of the license and other partners include Serica, JX Nippon Exploration and Production (U.K.) Limited and Mitsui.
Eni expects oil and gas production in 2018-2021 to grow at 4% per year. Project start-ups in Angola, Egypt, Ghana, Indonesia and Kazakhstan will enable the company achieve 4% targeted output growth through 2021. The surge can be attributed to the recent entry of Eni into the United Arab Emirates. Additionally, we are optimistic about the company’s exit from low-profit operations and efforts to broaden its international asset base.
Zacks Rank & Key Picks
Currently, Eni carries a Zacks Rank #3 (Hold).
A few better-ranked players in the energy space are SunCoke Energy, Inc SXC, Shell Midstream Partners, L.P SHLX and Unit Corporation UNT, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
SunCoke acquires, owns and operates coke making as well as coal mining operations. The company delivered average positive earnings surprise of 302.6% in the last four quarters.
Headquartered in Houston, TX, Shell Midstream Partners owns, operates, develops and acquires pipelines as well asother midstream assets. The company is expected to witness year-over-year earnings growth of 18.7% in 2018.
Unit Corp is a diversified energy company. The company has an average positive surprise of 21.2% in the last four quarters.
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