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Eni Discovers Light Oil the Second Time in South West Meleiha


Eni SpA E hit light oil on the B1-X exploration prospect located in South West Meleiha license, in the Egyptian Western Desert, about 130 kilometer north of the oasis of Siwa. This marks the second light oil find in the prospect.

Eni drilled the second well — SWM B1-X — to examine the deep geological sequences of the Faghur Basin. Drilled seven kilometer away from the first discovery (SWM A2-X), SWM B1-X reached a total depth of 4,523 meters. The second well stumbled upon 35 meters net of light oil in the Paleozoic sandstones of Dessouky Formation of Carboniferous age and in the Alam El Bueib sandstones of Cretaceous Age.

The well, opened to production in the Dessouky sandstones, delivered 5,130 barrels of oil per day (BOPD) of light oil (37° API) with low associated gas.

The discovery established high exploration and production potential of the Faghur Basin. In the short term, Eni intends to merge the drilling of other exploratory prospects located close to the A2-X and B-1X discoveries to form a productive area in Egypt.

The production is anticipated to be transferred to the already existing infrastructures and delivered to El Hamra Terminal via existing pipelines, once Ministry of Petroleum and Mineral Resources approves the development plan.

Eni wholly own the South West Meleiha license, through its subsidiary — International Egyptian Oil Company (“IEOC”). Through its Operating Company Agiba, which is held equally by IEOC and the Egyptian General Petroleum Corporation (EGPC), the subsidiary currently yields 55,000 barrels of oil equivalent per day from the Egyptian Western Desert.

Eni’s presence in Egypt dates back to 1954. The company is a leading producer with a daily yield of about 300,000 barrels of oil equivalent. This production is estimated to grow further within the year, owing to the ramp up of Zohr field.

Price Performance

In the past three months, Eni’s shares have gained 2.8% compared with the industry’s rise of 4.1%.

Zacks Rank & Stocks to Consider

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

A few better-ranked players in the same sector are Occidental Petroleum Corporation OXY, China Petroleum &Chemical Corporation SNP or Sinopec, and CVR Refining, LP CVRR. All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Occidental Petroleum is an international oil and gas exploration, and production company. It pulled off an average positive earnings surprise of 30.2% in the last four quarters.

Sinopec is one of the largest petroleum and petrochemical companies in Asia. The company delivered an average positive earnings surprise of 492.8% in the trailing four quarters.

Sugar Land, TX-based CVR Refining is an independent downstream energy partnership, with refining and associated logistics properties in the Midcontinent United States. The company delivered an average positive earnings surprise of 7.05% in the last four quarters.

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