Equinor (EQNR) Prefers Chappal as Buyer for Agbami Stake Sale
Equinor ASA EQNR, the Norwegian energy giant, chose a lesser-known company as the preferred buyer of its stake in one of Nigeria’s largest deep-water oil fields, per a Bloomberg report.
According to the report, Equinor has identified Chappal Energies Mauritius as the favored buyer for its 20.2% interest in the prolific Agbami field. This deepwater asset, operated by Chevron Corporation CVX, boasts an impressive daily oil production of approximately 100,000 barrels. While a formal sales agreement is yet to be finalized, Chappal Energies is currently working toward securing the necessary financing for the deal. The purchase price has not been disclosed at this stage.
Agbami holds substantial importance in Nigeria's oil production landscape, contributing approximately 7% to the country's total output this year. Currently, only the Shell plc SHEL-operated Bonga field surpasses Agbami in terms of oil production volume with an approximate capacity of producing 200,000 barrels of oil per day.
Five companies, including Prime Oil & Gas Cooperatief UA, submitted binding bids for Equinor's stake in the Agbami field. Notably, Prime O&G is a joint venture between Africa Oil Corp. and Brazil's Grupo BTG Pactual, and already holds a 12.5% share in the asset.
In addition to the Agbami divestment, Equinor is also evaluating the potential sale of its operations in Azerbaijan. This includes a stake sale in Azeri-Chirag-Gunashli field, the country's largest oil project.
Zacks Rank & Key Pick
Equinor currently carries a Zack Rank #5 (Strong Sell).
A better-ranked player in the energy sector is USA Compression Partners, LP, USAC currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
USA Compression Partners is one of the largest independent natural gas compression service providers across the United States in terms of fleet horsepower. With rising long-term consumption and production of natural gas, USAC’s growth prospects remain strong. The company has witnessed an upward earnings estimate revision for 2024 in the past 30 days.
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