Italy-based energy company
Eni SpA
(
E
) has commenced gas flow from the Marulk field located in offshore
Norway, about 80 kilometers from the coast.
Marulk is the first field directly operated by Eni in Norway,
with a 20% interest. Other partners -
Statoil ASA
(
STO
) and DONG E&P Norge - have interests of 50% and 30%,
respectively. Eni's presence in Norway dates back to 1965 and its
current yield there is about 135,000 Boe/d.
The Marulk field is estimated to contain reserves of 74.7
million barrels of oil equivalent (Boe). It has a daily average
output of 20,000 Boe/d. Of the daily output, 4,000 Boe/d is
allotted to Eni.
The field is part of Production License 122 consisting of two
formations - Lysing and Lange - holding gas and condensate.
The field's Plan for Development and Operation (
PDO
) received consent from the Ministry of Oil and Energy in July
2010. Following the approval, the field was developed in a short
span of two years through a fast-track development plan.
Eni's constant effort to adjust its portfolio to enhance value
for shareholders is supported by the expected strengthening of the
global economic scenario. Further, with production ramp-up in the
existing fields of Italy and Iraq, we believe that Eni offers ample
long-term visibility into profitability in the coming quarters.
However, we are concerned about Eni's refining business as its
underlying fundamentals are still weak following the political
disturbances in the Middle East that could suppress production.
Immense competition from peers such as Statoil is also a threat to
the company.
Per the Zacks Consensus, earnings per share for 2012 and 2013
are pegged at $5.75 and $6.32, respectively. This implies a
year-over-year growth of 7.5% in 2012 and 9.9% in 2013.
Eni holds a Zacks #3 Rank, which translates to a Hold rating for
a period of one to three months. Longer term, we maintain our
Neutral recommendation on the stock.
ENI SPA-ADR (
E
): Free Stock Analysis Report
STATOIL ASA-ADR (
STO
): Free Stock Analysis Report
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