Equinor (EQNR) to Acquire Renewable Energy Leader Rio Energy
Equinor ASA EQNR announced that it has signed an agreement with Denham Capital to acquire Rio Energy, one of Brazil’s leading onshore renewables company. Equinor aims to strengthen its position as a broad energy player in the Brazilian market with the acquisition.
Following the transaction and the carve out of certain assets by Denham, Equinor said that it will hold a 100% stake in Rio Energy, retain the current management team and a total of approximately 140 employees.
The deal is in sync with Equinor's strategy, which involves expanding its onshore renewables business in specific markets through acquisitions of local companies with top-notch teams and project pipelines.
The acquired portfolio includes a 600-megawatts (MW) pre-construction solar portfolio, a project pipeline of about 1.2 gigawatts of onshore wind and solar projects, and the 200-MW Serra da Babilonia 1 producing onshore wind farm in the state of Bahia.
The acquired project portfolio is estimated to deliver at the upper end of Equinor's forecast range of 4-8% real base project return for renewables projects, including acquisition price. Rio Energy will be a fully owned Equinor subsidiary, and the team and management will continue to develop its current portfolio.
According to Veronica Coelho, country manager for Equinor in Brazil, with Rio Energy on board, Equinor will be better able to expand its portfolio and solidify its position as a well-grounded energy firm in Brazil. He added that by establishing an attractive renewables position in the country, together with a robust oil and gas portfolio, EQNR is supporting Brazil's ambitions toward having a diverse energy mix.
Zacks Rank & Key Picks
Equinor currently carries a Zack Rank #3 (Hold).
Some better-ranked stocks in the energy sector are Evolution Petroleum Corporation EPM, NGL Energy Partners LP NGL and Murphy USA MUSA. While Evolution Petroleum sports a Zacks Rank #1 (Strong Buy), both NGL Energy Partners and Murphy USA 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 2024 in the past 30 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 60 days.
Murphy USA operates stations close to Walmart supercenters and sells low-cost, high-volume fuel. This helps the company to get a lot more business than its competitors. Another significant competitive advantage for the firm is its access to product distribution centers and pipelines, which helps control costs in the intensely competitive retail sector. Over the past seven days, MUSA has witnessed an upward earnings estimate revision for 2024.
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