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Eni (E) Strikes Oil in Angola, Sells Stake in Tarfaya Area

Zacks Equity Research
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Eni SpA E made an important oil discovery in Block 15/06 in the Agogo exploration prospect, located in Angola’s deep water.

The find is estimated to hold light oil in place in the range of 450-650 million barrels with expected further upside potential.

The Agogo-1 NFW well, which led to the discovery, is located about 180 kilometers off the coast and about 20 kilometers west from the N’Goma FPSO (West Hub). Poseidon drillship was used to drill the well in a water depth of 1636 meters, which reached a total depth of 4450 meters.

A single oil column of about 203 meters with 120 meters of net pay of high quality oil (31° API) was proved by Agogo-1 NFW. The oil was held in a sub salt diapir setting in Lower Miocene sandstones with exceptional petrophysical properties. The data obtained from Agogo-1 NFW signify a production capacity of more than 20,000 barrels of oil per day.

Following Kalimba and Afoxe, Agogo represents the third find of commercial nature since the partners of Block 15/06 decided to begin an exploration campaign in 2018.

The discovery paves way for new prospects related to oil exploration below salt diapirs in the north-west part of the prolific Block 15/06. Eni’s advanced and complicated proprietary seismic imaging technologies have helped significantly in the planning and the drilling of the Agogo prospect.  

Eni, as the operator of Block 15/06, has a stake of 36.8%. Other partners include Sonangol P&P and SSI Fifteen Limited, holding 36.8% and 26.4%, respectively. The partners will assess the discovery and initiate studies to fast track development.

Eni to Divest Stake in Tarfaya Area

In another announcement, the company stated that it has inked a farm out agreement with Qatar Petroleum. Per the terms, Qatar Petroleum will acquire a stake of 30% in Tarfaya Offshore Shallow Petroleum Agreement, which involves 12 exploration blocks in the offshore of Morocco.

Located in the southern part of the Moroccan offshore shallow waters, the Tarfaya Area lies in water depth of about 1,000 meters and is spread across an area of about 23,900 square kilometers.

Eni, as the operator of the Tarfaya Area, currently has a stake of 75% and Office National des Hydrocarbureset des Mines (ONHYM) holds the remaining 25%. On completion of the transaction, Eni, Qatar Petroleum and Office National des Hydrocarbureset des Mines will hold 45%, 30% and 25%, respectively.

Currently, the partners are carrying out geological and geophysical studies as part of the first exploration period work program under the Tarfaya Petroleum Agreement.

Earlier this week, Eni inked a farm out agreement with Qatar Petroleum for a participating interest of 25.5% in block A5-A, offshore Mozambique.

Zacks Rank & Key Picks

Eni currently carries a Zacks Rank #3 (Hold).

Investors interested in the energy sector can opt for some better-ranked stocks as given below.

CrossAmerica Partners L.P. CAPL is involved in the wholesale distribution of motor fuels, comprising gasoline and diesel fuel. The company delivered average positive earnings surprise of 655% in the last four quarters. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

SEACOR Holdings, Inc. CKH is a diversified holding company, which is mainly focused on domestic and international transportation, logistics, as well as risk management consultancy. The company delivered average positive earnings surprise of 49.6% in the trailing four quarters. The stock currently has a Zacks Rank #2 (Buy).

San Antonio, TX-based NuStar Energy L.P. NS is a midstream energy company. For 2019, its bottom line, which has witnessed three upside revisions in the past 60 days, is expected to grow 64.2% year over year. The company currently holds a Zacks Rank #2.

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