Eni announces discovery of1 trillion cubic feet of gas onshore Nigeria, plans to bring the well online immediately
Eni S.p.A. E recently announced a huge discovery of gas and condensate onshore Nigeria. The reserves are estimated to have around 1 trillion cubic feet (Tcf) of gas and 60 million barrels of associated condensate. The company found the hydrocarbon deposit in Obiafu-Obrikom fields, which are located in Niger Delta's OML61.
The discovery was made in the Obiafu-41 deep well that hit more than 130 meters of superior quality hydrocarbon-bearing sands of Oligocene age. Eni will conduct an appraisal campaign at the site to gauge further potential of the discovery. The company expects to bring the well online immediately, which can boost its gas production volumes. The well is estimated to deliver more than 100 million standard Cf of natural gas and 3,000 barrels of associated condensates per day.
Eni made the discovery through its affiliate Nigerian Agip Oil Company (NAOC), in which the Italian energy major holds a 20% operating stake. State-owned NNPC owns a 60% interest in NAOC, while the remaining 20% is held by Oando.
Notably, in 2018, Eni's equity gas output volumes in Nigeria amounted to 92 billion Cf, which constituted around 5% of the country's total production. The company, which has operations in the country since 1962, is expected to further increase its footprint therein with the latest discovery. With the growing popularity of cleaner energy sources around the globe, the natural gas discovery can be fruitful for the company.
Nigeria is expected to have natural gas reserves of 202 trillion Cf and unproven reserves of 600 trillion Cf. Yet, the country's energy access is underserved with 12 gigawatts of installed capacity. Natural gas production can play a significant role in power generation in the domestic market. As such, the latest discovery — which is part of the near-field exploration campaign of NAOC — is noteworthy for the country's energy industry.
Eni's shares have declined 6.8% year to date compared with 5.8% collective fall of the industry it belongs to.
Zacks Rank and Stocks to Consider
Currently, the stock carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the energy sector are given below:
NuStar Energy L.P. NS is one of the largest independent liquids terminal and pipeline operators in the United States. Its third-quarter earnings per unit are expected to surge more than 100% year over year. It has a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Enbridge Inc. ENB is a leader in energy transportation and distribution in North America and internationally. The Zacks Rank #2 company has not missed earnings estimates in the trailing four quarters. It delivered an average positive earnings surprise of 11.3% during this period.
TC PipeLines, LP TCP is a midstream energy firm operating in the United States. It outpaced earnings estimates thrice in the trailing four quarters, with an average positive surprise of 12.6%.
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