By Zacks Equity Research, Zacks.com
Eni SpA E recently gained two exploration blocks offshore Cyprus, in the competitive international bid round "3rd Licensing Round." We expect these developments to result in stock price appreciation. Year to date, the stock has gained 6.9%, while the Zacks categorized sub industry Oil & Gas- International Integrated Market has increased by 19%.
Eni will be the operator of Block 6 with 50% interest, while the balance will be held by partner, Total SA TOT . Eni will acquire a 100% stake in Block 8.
Eni's successfully explored areas in the neighboring Egyptian offshore, including the Zohr massive gas field, which have geological similarities with these newly awarded areas.
These recent awards further strengthen Eni's strategic position in the area. Notably, the company was awarded the blocks 9, 3 and 2 in the 2nd international bid round in 2012. The company also holds three exploration blocks on the Egyptian side - Shorouk (where the Zohr field is located), Karawan and North Leil. Eni holds 50% stake and 100% stake in Karawan and North Leil, respectively.
Eni will capitalize on the synergies of assets that are already in its portfolio, thereby buying time to market and lower costs. Per Eni's CEO, these assignments establish the effectiveness of the company's exploration strategy to keep procuring substantial shares and use the knowledge base developed from the intense activity associated with the Zohr field. It is another step toward a possible future definition of a powerful hub for natural gas in the Eastern Mediterranean, which could play a key role in the future energy security of the area as well as Europe's.
Eni's has been enjoying a strong foothold in Cyprus since 2013, where it holds and operates the offshore exploration blocks 2, 3 and 9.
Eni currently has a Zacks Rank #2 (Buy). Other well-ranked players in the same sector include SunCoke Energy Inc. SXC and Futurefuel Corp. FF . Both these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .
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