Per Bloomberg, Equinor ASA EQNR intends to divest stake in the Eagle Ford shale to focus on prospects in the United States. The company did not disclose any details related to the transaction.
Equinor has held discussions with potential buyers and is likely to sell the complete stake to one. Also, the company may look for partners for the division, as finding a buyer for the total holding is difficult.
At the end of 2018, the company held drilling rights on 71,000 net acres in the Eagle Ford. Repsol, the Spanish oil explorer, is the other partner in the shale. Equinor owns majority of the working interest as well as manages the drilling and pays for the bulk.
Equinor entered the Eagle Ford shale in 2010 through an agreement with Talisman Energy Inc. The deal, valued at $1.3 billion, was related to the development of the fields. In 2015, Repsol purchased Talisman and became a partner.
In 2014, Equinor and Talisman reportedly held discussions regarding the divestiture of their joint venture. Notably, explorers lower operations in the Eagle Ford as drilling becomes less profitable when oil prices decline.
In the United States, Equinor is seeking deals for natural gas-rich acreage to add to its huge position in the Appalachian region. Other oil majors have been expanding their drilling rights in the flourishing Permian Basin of Texas and New Mexico.
Zacks Rank & Key Picks
Currently, Equinor carries a Zacks Rank #3 (Hold).
Some better-ranked players in the energy space are Antero Resources Corporation AR, CrossAmerica Partners L.P. CAPL and Lonestar Resources US Inc. LONE. While Antero Resources and CrossAmerica Partners sport a Zacks Rank #1 (Strong Buy), Lonestar Resources carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Antero Resources’ is an independent explorer, primarily engaged in the acquisition and development of natural gas, natural gas liquids and oil resources in the Appalachian Basin. The company earnings beat the Zacks Consensus Estimate in two of the last four quarters.
CrossAmerica Partners is involved in the wholesale distribution of motor fuels, comprising gasoline and diesel fuel. The company delivered an average positive earnings surprise of 452.2% in the last four quarters.
Lonestar Resources is a Fort Worth, TX-based exploration and production company. The top line for 2019 is expected to increase 4.3% year over year. It currently has a Zacks Rank of 2.
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