Italian energy giant
) disclosed its strategic plan for 2013-2016. Per the plan,
production growth is pegged at more than 4% per year for
2013-2016 and 3% per year through 2022.
The growth in the first phase is likely to be backed by organic
development as well as exploration successes in major development
hubs, including Russia (Yamal), the Barents Sea, Kazakhstan,
Venezuela, the Far Eastand the sub-Saharan region.
Broad based and synergic pipeline development along with a low
decline rate of about 4% is expected to support the second phase
Eni remains cautious about its gas segment, particularly in
Italy, due to the prevailing macroeconomic weakness.
Attempts are on to sustain profitability, with 80% of supply
volumes awaiting renegotiations with buyers. In 2016, the Gas
& Power segment is expected to have pro forma adjusted EBITDA
of around 1.5 billion euro.
In Refining & Marketing, Eni has commenced an aggressive cost
reduction program and is optimizing its refining operations to
improve profitability. Some of the key projects include
conversion of the Venice refinery into a bio-refinery. EBIT
growth is estimated to exceed 500 million euro by 2016.
Eni has assured a turnaround for Versalis in Europe. Currently,
it is characterized by increasing pressure on prices. However,
Eni is committed to the expansion of its emerging market
activities through strategic partnerships and will continue to
support proposals for efficient plants and processes. These new
initiatives are projected to increase EBIT to over 400 million
euro by 2015 and to over 500 million euro by 2016.
Eni's leverage also halved year over year in 2012 and is targeted
at 10-30% for 2013-2016. Eni intends to invest around 56.8
billion euro over the same time frame. Further, the new
shareholders' distribution policy proposes a dividend of 1.10
euro per share, up approximately 2% from 2012. A new buyback
program is also slated.
Eni holds a Zacks Rank #4 (Sell rating). However, there are other
stocks in the energy sector, namely,
Range Resources Corporation
EPL Oil & Gas, Inc.
), which carry a Zacks Rank #1 (Strong Buy) and are expected to
perform impressively over the next few months.
ENI SPA-ADR (E): Free Stock Analysis Report
EPL OIL&GAS INC (EPL): Free Stock Analysis
ENERPLUS CORP (ERF): Free Stock Analysis
RANGE RESOURCES (RRC): Free Stock Analysis
To read this article on Zacks.com click here.