ExxonMobil (XOM) to Sell Stake in Canada Exploration Blocks
Exxon Mobil Corporation XOM entered an agreement with QatarEnergy to divest stakes in two exploration blocks offshore Newfoundland & Labrador.
Per the terms of the agreement, QatarEnergy will acquire interests in exploration licenses (ELs) 1162 and 1167. The companies did not reveal any financial details of the agreement.
The acquisition will enable QatarEnergy to expand its offshore exploration portfolio in Atlantic Canada. EL 1167 and EL 1162 cover more than 3800 square kilometers.
Once the deal closes, QatarEnergy will have a 28% interest in EL 1167. ExxonMobil will continue to operate EL 1167 with a 50% interest. QatarEnergy will also have a 40% interest in EL 1162, while ExxonMobil holds the rest.
QatarEnergy has been working on expanding its offshore oil and gas portfolio. In recent years, the company entered some of the most promising oil and gas basins through deals with the leading Western companies keen to acquire stakes in Qatar’s LNG industry.
In 2022, ExxonMobil and QatarEnergy won a key exploration block offshore Newfoundland & Labrador after emerging as the successful bidder for the Parcel 8 deep-water acreage in the Orphan basin. In 2021, QatarEnergy entered Canada’s offshore arena through a contract with ExxonMobil for EL 1165A offshore Newfoundland & Labrador.
Qatar, the world’s largest LNG supplier, aims to expand its production to 126 million tons per by 2027. Demand for natural gas is expected to rise in the coming decades as economies across the world are gradually transitioning to cleaner energy sources.
Moreover, Europe’s efforts to seek new natural gas sources to replace Russia supplies strengthened the prospects for LNG demand.
Shares of ExxonMobil have outperformed the industry in the past six months. The stock has gained 19.1% compared with the industry’s 14.2% rally.
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Zacks Rank & Key Picks
ExxonMobil currently carries a Zack Rank #3 (Hold).
Investors interested in the energy sector might look at the following companies that presently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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