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ExxonMobil's (XOM) UK North Sea Assets Attract Major Bidders

Zacks Equity Research
·3 mins read

Exxon Mobil Corporation’s XOM assets in the U.K. North Sea have drawn several companies’ attention, per Bloomberg. The energy mammoth is planning to leave the ageing region.

ExxonMobil commenced the sale process this July, following operational delays due to the pandemic and low crude prices. Per Bloomberg, the company is selling stakes in 15 fields in the region. These assets are expected to come up with net production of 37,000 barrels of oil equivalent per day for ExxonMobil during this year. The list of assets for sale includes two exploration areas and stakes in pipeline infrastructure.

The companies that are reportedly bidding for the U.K. North Sea assets include China Petroleum & Chemical Corporation or Sinopec SNP, EnQuest PLC ENQUF, Kuwait Foreign Petroleum Exploration Company, Tailwind Energy Ltd, NEO Energy, Siccar Point Energy and Viaro Energy. The binding bids for the assets are expected to be received in October. The divestment will likely close in first-quarter 2021.

Notably, the company divested Norway assets to Var Energi for $4.5 billion in 2019. It is retreating from Europe through a massive global divestment plan, while focusing more on operations in the United States. Moreover, the company has other major assets to focus on such as offshore Guyana, where it made 18 world-class oil discoveries at the Stabroek Block. In the block, the company estimates gross recoverable resource of more than 8 billion oil-equivalent barrels. Importantly, the firm projects daily Guyana oil production volumes of more than 750,000 gross barrels by 2025.

Price Performance

The stock has lost 7.8% in the past six months compared with 9.6% fall of the industry it belongs to.

Zacks Rank & Stock to Consider

Currently, ExxonMobil has a Zacks Rank #3 (Hold). A better-ranked player in the energy space is Equinor ASA EQNR, holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Equinor’s bottom line for 2021 is expected to skyrocket 125% year over year.

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Exxon Mobil Corporation (XOM) : Free Stock Analysis Report
 
China Petroleum Chemical Corporation (SNP) : Free Stock Analysis Report
 
ENQUEST PLC LON (ENQUF) : Free Stock Analysis Report
 
Equinor ASA (EQNR) : Free Stock Analysis Report
 
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Zacks Investment Research