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Eni (E) Makes Oil Discovery at Yatzil-1 Well Offshore Mexico

Eni SpA E made an oil discovery on the Yatzil exploration prospect in Block 7 in the Sureste Basin off Mexico’s coast.

The Yatzil exploration prospect is situated in the mid-deep water of the Cuenca Salina in the Sureste Basin. Eni operates Block 7 with a 45% interest, while Capricorn and Citla Energy own 30% and 25% interest, respectively.

Using the Valaris DPS5 semisub rig, the Yatzil-1 well was drilled in 284 meters of water to a total depth of 2,441 meters. The Yatzil-1 well encountered in excess of 40 meters of net pay sands with good quality oil in the Upper Miocene sequences, with excellent petrophysical properties.

Yatzil-1 is Eni’s eighth successful well drilled in the basin and the second commitment well of Block 7. The latest discovery is located 25-30 kilometers away from other discoveries. According to preliminary estimates, the latest discovery is estimated to hold 200 million barrels of oil.

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Yatzil-1 is not the first discovery of Eni in the Sureste Basin. In 2020, Eni announced a discovery in the Sureste Basin, saying it could contain 200-300 million barrels of crude oil. The discovery was made in the Eni-operated Block 10, wherein the company holds the majority stake.

Eni has been contributing to Mexico’s growth since 2006. The company holds rights in eight exploration and production blocks, located in the Sureste Basin in the Gulf of Mexico.

Mexico is crucial to Eni’s future organic growth strategy. The latest discovery confirms the significance of the company’s Mexico asset portfolio, contributing to the potential synergic cluster development of several prospects in the area.

Price Performance

Shares of Eni have outperformed the industry in the past six months. The stock has gained 17.3% compared with the industry’s 5.2% growth.

 

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

 

Zacks Rank & Key Picks

Eni currently carries a Zack Rank #3 (Hold).

Investors interested in the energy sector might look at the following companies that presently flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Sunoco LP’s SUN fourth-quarter 2022 earnings of 42 cents per unit missed the Zacks Consensus Estimate of 77 cents. Weak quarterly earnings resulted from the higher total cost of sales and operating expenses.

Sunoco has witnessed upward estimate revisions for 2023 earnings in the past 30 days. For 2023, Sunoco expects adjusted EBITDA of $850-$900 million.

RPC Inc.’s RES adjusted earnings of 41 cents per share in the fourth quarter beat the Zacks Consensus Estimate of 30 cents. The strong quarterly results were backed by higher activity levels in all the service lines and rising equipment utilization.

As of Dec 31, RPC had cash and cash equivalents of $126.4 million, up sequentially from $73.2 million. Nonetheless, the company managed to maintain a debt-free balance sheet.

Valero Energy Corporation’s VLO fourth-quarter 2022 adjusted earnings of $8.45 per share beat the Zacks Consensus Estimate of $7.45 per share. The strong quarterly results were driven by increased refinery throughput volumes and a higher refining margin.

Valero can benefit from the Gulf Coast export volumes as fuel demand recovery gets support from Asia economies. The Gulf Coast contributed 59.4% to the total throughput volume in the fourth quarter of 2022.

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Eni SpA (E) : Free Stock Analysis Report

Valero Energy Corporation (VLO) : Free Stock Analysis Report

Sunoco LP (SUN) : Free Stock Analysis Report

RPC, Inc. (RES) : Free Stock Analysis Report

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