Eni to Acquire 50% Stake in Exploration Block OFF-5 Offshore Uruguay

Eni S.p.A E, an Italian integrated energy company, has inked an agreement with Argentina’s state-owned oil company YPF YPF to acquire a 50% share and operatorship in the OFF-5 Block, offshore Uruguay. The agreement, pending approval from the authorities in Uruguay, further strengthens the relationship between Eni and YPF. The financial details of the deal have not been disclosed yet.

The OFF-5 exploration block is located 200 kilometers off the coast, with water depth at the site ranging from 800 meters to as deep as 4,100 meters. The large exploration block spans 16,883 square kilometers and is currently in the first exploration phase. The region falls within a largely unexplored part of the Atlantic Margin. However, the block’s geological features are close to other nearby petroleum basins with proven oil and gas reserves. The block is currently operated by MIWEN, a fully-owned subsidiary of YPF.

Eni believes that Block OFF-5 lies in a highly prospective region, suggesting strong potential for hydrocarbon discoveries. The company mentioned that the block fits within its exploration portfolio, which brings together large, near-field exploration targets that lie close to Eni’s existing infrastructure. It also includes diversified, select high-impact opportunities that involve higher risk. Eni stated that it leverages its proprietary technologies across these projects to accelerate the exploration process and maximize value.

Eni and YPF have previously signed agreements related to Argentina LNG, an integrated upstream-midstream project, where Eni has been chosen by YPF as a strategic partner for a phase of the LNG project.

Zacks Rank and Key Picks

Currently, E and YPF carry a Zacks Rank #3 (Hold).

Some top-ranked stocks from the energy sector are Canadian Natural Resources Ltd. CNQ and FuelCell Energy FCEL. While Canadian Natural Resources currently sports a Zacks Rank #1 (Strong Buy), FuelCell carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Canadian Natural Resources is one of the largest independent energy companies in Canada engaged in the exploration, development and production of oil and natural gas. The company boasts a diversified portfolio of crude oil, natural gas, bitumen and synthetic crude oil. It has delivered 25 consecutive years of dividend increases, one of the longest streaks among global oil producers.

FuelCell Energy is a clean energy company offering low-carbon energy solutions. It produces power using flexible fuel sources such as biogas, natural gas and hydrogen. The company designs fuel cells that generate electricity through an electrochemical process that combines fuel with air, reducing carbon emissions and minimizing the environmental impact of power generation. As such, FCEL is anticipated to play a crucial role in the energy transition by enabling industries and communities to shift from traditional fossil fuels to low-carbon alternatives.

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This article originally published on Zacks Investment Research (zacks.com).

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