ExxonMobil (XOM) to Extend Exploration Activities in Suriname
Exxon Mobil Corporation XOM and Malaysian oil giant Petronas have agreed to extend their exploration activities in Suriname.
The decision comes as part of their ongoing efforts to replicate the massive oil and gas success found in the neighboring basin offshore Guyana.
Despite the initial challenges faced in Suriname, where exploration has not yet met the levels of success seen in Guyana, Petronas and ExxonMobil's perseverance is notable. The discovery of gas at offshore Block 52 in 2020 was deemed commercially unattractive at the time. However, the companies have now committed to further exploring the Sloanea-1 discovery in the hopes of developing a commercial gas field in Block 52.
The planned drilling of the Sloanea-2 appraisal well marks a crucial step in this journey. Success here could lead to the commencement of production as early as 2031, signaling a long-term commitment to unlocking Suriname's energy potential. A key element in making this project viable is the agreement on a tax-free period of 10 years from the start of production, a condition that has received government approval.
The collaboration between ExxonMobil and Petronas dates back to 2013 when the companies signed a production-sharing contract for Block 52. Additionally, Petronas's acquisition of production-sharing contracts for offshore blocks 63 and 64 in December, following a competitive bidding round, reflects the company's growing investment in the region.
One of the innovative approaches under consideration to maximize the project's potential is the development of a floating liquefied natural gas plant. This consideration is driven by the need to find efficient and economically viable solutions for gas processing and transportation, given the offshore nature of the discovery.
The agreement represents a hopeful stride toward establishing a significant gas production operation in Suriname. As these companies continue to assess and develop the region's resources, the rest of the world will anticipate the emergence of a new energy hub in South America.
Zacks Ranks & Stocks to Consider
ExxonMobil currently carries a Zacks Rank #3 (Hold).
Investors interested in the energy sector may look at some better-ranked companies mentioned below. Each of these three companies presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Valaris VAL is the industry leader in offshore drilling services across all water depths and geographies. Operating a high-quality rig fleet of ultra-deepwater drillships, versatile semisubmersibles and modern shallow-water jackups, the company has experience operating in nearly every major offshore basin.
The Zacks Consensus Estimate for VAL’s 2024 earnings per share (EPS) is pegged at $4.75. Valaris has witnessed upward earnings estimate revisions for 2024 in the past 60 days. VAL’s 2024 earnings are expected to soar 118.5% year over year.
Murphy USA Inc. MUSA is a leading independent retailer of motor fuel and convenience merchandise in the United States.
The Zacks Consensus Estimate for MUSA’s 2024 EPS is pegged at $25.58. The company has a Zacks Style Score of B for Value and Growth. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.
Energy Transfer ET is a publicly traded limited partnership focused on diverse energy assets in the United States. The company’s core operations involve natural gas midstream services, transportation, storage, crude oil facilities and marketing assets.
The Zacks Consensus Estimate for ET’s 2024 EPS is pegged at $1.44. The company has witnessed upward earnings estimate revisions for 2024 in the past 30 days. ET’s 2024 earnings are expected to rise 32.1% year over year.
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