Markets

Shell Gets Exploration Permit for Silistar Block in Bulgaria

Royal Dutch Shell plcRDS.A has been selected by Bulgaria for carrying out exploration activities at the country's offshore oil and gas block. Although Shell and Bulgaria have not yet entered into a deal, an agreement is likely to be signed by the end of October.

Bulgaria depends primarily on natural gas imported from Russia. So to reduce its dependence, Bulgaria opened tenders for Silistar block 1-14 and Teres block 1-22 a few months back. Out of the two, Shell came up as the only bidder for Silistar, which is located off the coast of Black Sea and spreads over 7,000 square kilometers. Most importantly, Silistar is the largest block in the Black Sea.

According to Temenuzhka Petkova, energy minister of Bulgaria, the country has chosen Shell for the exploration permit at its Silistar Block for a period of five years. It is to be noted that Shell has promised to invest roughly $21 million for the block's seismic surveys.

Shell is one of the largest integrated energy firms in the world with a strong and diversified portfolio of development projects that offer attractive long-term opportunities. Moreover, Shell's $70-billion buyout of BG Group will boost its strong and diversified portfolio of global energy businesses that offer attractive long-term growth opportunities.

However, the oil price slump has affected Shell's earnings and cash flows, in particular at its upstream unit. Moreover, Shell's ADRs are expected to remain soft due to its major natural gas focus and lofty capital spending.

As a result, Shell currently carries a Zacks Rank #3 (Hold), which implies that the stock will perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, some better-ranked players in the energy sector are Tesoro Corporation TSO , Matrix Service Company MTRX and Alon USA Partners, LP ALDW . Each of these stocks sports a Zacks Rank #1 (Strong Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

TESORO CORP (TSO): Free Stock Analysis Report

ROYAL DTCH SH-A (RDS.A): Free Stock Analysis Report

MATRIX SERVICE (MTRX): Free Stock Analysis Report

ALON USA PTNRS (ALDW): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

RDS.A MTRX

Other Topics

Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More