ExxonMobil (XOM) in Talks to Merge Gas Development Projects
Exxon Mobil Corporation XOM, alongside TotalEnergies TTE, is entering discussions with Suriname’s state-owned oil company, Staatsolie, to potentially develop natural gas fields along the maritime borders shared with Guyana.
To the west of Suriname, ExxonMobil has already made significant progress in Guyana, leading a consortium that has elevated the country’s oil production to 650,000 barrels per day. This consortium is exploring the development of gas fields in Guyana, intending to enhance the country’s energy revenues through domestic supply and exports.
In Guyana, ExxonMobil’s consortium has unveiled six projects primarily focused on oil, owing to the discovery of more than 11 billion barrels of recoverable resources. An upcoming seventh project may pivot toward gas, highlighting the potential for expanded gas exploitation in the region. Notably, two of ExxonMobil’s natural gas-rich findings in Guyana are proximate to Suriname’s gas fields, discovered by TotalEnergies and APA Corporation APA.
In Suriname, the spotlight is on Block 58, an offshore site under TotalEnergies and APA Corp’s stewardship, projected to initiate oil production by 2028. Yet, the project’s financial forecast is challenging, with drilling costs having doubled in recent years.
Despite these hurdles, Suriname’s gas sector shows promise, especially with the involvement of Petronas and ExxonMobil in Block 52’s exploration efforts. Petronas, in particular, has hinted at the possibility of a liquefied natural gas (“LNG”) project, backed by favorable fiscal arrangements with Staatsolie.
The move is part of Suriname’s broader strategy to attract foreign investment in its burgeoning energy sector, aiming to become a regional gas hub. While Suriname anticipates its first major offshore oil production to commence in about four years, the collaboration with industry giants like ExxonMobil and TotalEnergies could significantly accelerate its journey toward establishing a substantial footprint in the energy market.
The evolving landscape of Suriname’s energy sector is attracting attention from global players, indicating a competitive and expanding market. With Suriname’s recent launch of a bidding round, the potential for growth in its oil and gas industry is significant, setting the stage for the country to emerge as a pivotal energy hub in the region.
Price Performance
ExxonMobil shares have outperformed the industry in the past three months. The stock has gained 11.9% compared with the industry’s 6.2% growth.
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Zacks Ranks & Stock to Consider
ExxonMobil currently carries a Zacks Rank #3 (Hold).
Investors interested in the energy sector may look at a better-ranked company mentioned below. This company presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
RPC Inc. RES derives strong and stable revenues from diverse oilfield services that include pressure pumping, coiled tubing and rental tools. In 2023, the company paid out $34.6 million in dividends, whereas share repurchases totaled $21.1 million.
The Zacks Consensus Estimate for RPC’s 2024 and 2025 EPS is pegged at 88 cents and $1.13, respectively. The company has a Zacks Style Score of A for Growth and Value.
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