ExxonMobil GoM Asset Sale Reportedly Attracts Repsol & Ineos

Exxon Mobil Corporation’s XOM Gulf of Mexico (GoM) oilfield divestment package has attracted Spanish energy company, Repsol SA REPYY and United Kingdom-based Ineos Group Holdings’ attention, per Bloomberg. The value of the assets in the package is estimated at $1.5 billion.

If Repsol acquires the assets, it would increase its footprint in the area whereas for Ineos it would mark its foray into the prolific region. Moreover, the buyout can help Ineos in generating substantial value from operations as it already has petrochemical plants in the United States’ Southern part. The divestment deal is expected to be signed within a month at the earliest. 

Notably, ExxonMobil expressed its interest to divest some of the operated and non-operated assets in the region last October. The company always looks for better opportunities. The GoM divestments will likely enable it to focus on its prolific upstream assets globally, given a number of major projects coming online over the next few years. Markedly, with three fresh offshore oil discoveries in Guyana, ExxonMobil recently completed 13 discoveries in the Stabroek Block.

Moreover, the company recently made the world's third biggest natural gas discovery in the last two years in the Glaucus-1 well, located off the coast of Cyprus. The new discovery may comprise 5-8 trillion cubic feet of natural gas resource. Also, in a bid to address transport constraints and pump out five times more oil from the Permian through 2025, ExxonMobil is investing billions in the basin’s midstream infrastructure.

Price Performance

The largest publicly-traded energy company has gained 11.3% year to date compared with 7.7% collective gain of the industry it belongs to.

Zacks Rank & Stocks to Consider

Currently, ExxonMobil has a Zacks Rank #3 (Hold). Some better-ranked players in the energy space include Hess Corporation HES and Cactus, Inc. WHD. While Hess sports a Zacks Rank #1 (Strong Buy), Cactus holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.  

Hess’ earnings are expected to grow more than 130% through 2019.

Cactus’ earnings growth is projected at 14% through 2019.

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Exxon Mobil Corporation (XOM): Free Stock Analysis Report

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