Exxon Mobil Corporation XOM, the U.S. oil and gas giant, has withdrawn its stake from Block 52, offshore Suriname, per a statement by Staatsolie, the national oil company of Suriname. The company has transferred its 50% working interest in the block to Petronas, the Malaysian national energy firm. Petronas is the operator of the block that now holds a 100% working interest.

XOM’s decision to exit Block 52 came in despite the discovery of gas reserves on the site in 2020. Staatsolie states that ExxonMobil’s exit from Block 52 is part of a broader effort by the U.S. energy giant to evaluate its assets and optimize its global portfolio. Petronas is expected to continue its operations on the block without any disruptions.

Discoveries in Block 52

Block 52 is located off the northern coast of Suriname and spans an area of approximately 4,749 square kilometers. The first discovery on the block named Sloanea was announced by Petronas in December 2020. Further, two other discoveries were made in the block, namely Roystonea and Fusaea, in 2023 and 2024, respectively.

The Sloanea Discovery

Staatsolie and the partners in Block 52 agreed to explore the Sloanea discovery further for potential gas finds in March 2024. The Surinamese oil company noted that a Letter of Agreement (“LoA”) was required to further explore the gas discovery made in 2020.

Staatsolie and its partners drilled the Sloanea-1 exploration well in the block, which led to the discovery of gas reserves in the region. However, initially, a small quantity of gas was identified and discovery was assumed to be economically infeasible. The Surinamese oil company further mentioned that developing an offshore gas field involves more complexities compared to the development of an offshore oil field.

Petronas’ Long-Term Plans for Block 52

Staatsolie and the Block 52 partners held further discussions and decided to move forward with the exploration of the Sloanea discovery. The shared interest of all the companies later resulted in a LoA. Staatsolie mentioned that Petronas was expecting to drill the appraisal well, Sloanea-2, in April 2024 to determine if the gas reserves were large enough to be commercially viable for development. After drilling the appraisal well, Petronas also expects to conduct a production test to evaluate the amount of gas that can be extracted from the field. Petronas expects to begin gas production in 2031 from the field if the appraisal well yields successful results.

XOM’s Zacks Rank and Key Picks

Currently, XOM carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the energy sector are Smart Sand, Inc. SND, FuelCell Energy FCEL and Nine Energy Service NINE, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Smart Sand is a low-cost producer of high-quality Northern White frac sand, an ideal proppant for hydraulic fracturing and various industrial applications. The company provides proppant and other logistics services for several companies in the oil and gas industry. With sustained oil and gas market demand, SND is expected to see growing demand for its services, providing a positive outlook.

FuelCell Energy is a clean energy company offering low-carbon energy solutions. It produces power using flexible fuel sources such as biogas, natural gas and hydrogen. The company designs fuel cells that generate electricity through an electrochemical process that combines fuel with air, reducing carbon emissions and minimizing the environmental impact of power generation. As such, FCEL is anticipated to play a crucial role in the energy transition by enabling industries and communities to shift from traditional fossil fuels to low-carbon alternatives.

Nine Energy Service provides onshore completion and production services for unconventional oil and gas resource development. The company operates across key prolific basins in the United States, including the Permian, Eagle Ford, MidCon, Barnett, Bakken, Rockies, Marcellus and Utica, as well as throughout Canada. With a sustained demand for oil and gas in the future, the need for NINE’s services is anticipated to increase, which should position the company for growth in the long run.

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